0% loans what's in tomorrow's budget

Dandytf

As title stated from news paper report.

Is chancellor planning to offer 0% interest loans to help low earners with crises debts
Nice idea, probably not as simple as that.

[Deleted User]

The way I read it is that he will hand £2million over to the debt charities to look at the possibility of setting up these loans.
We will find out tomorrow.

jonesMUFCforever

I thought they already existed - social loans, who take minute repayments from your benefits?

Shakin_Steve

venison wrote: »

The way I read it is that he will hand £2million over to the debt charities to look at the possibility of setting up these loans.
We will find out tomorrow.

£2 million? How far will that go? (Rhetorical question)

jimbo747

I said several months back I'd love to see a govt funded and secured loan paid directly to creditors (for personal debts only), perhaps inflation rate + 0.5% that anyone can take out but cannot be written off in bankruptcy, but the condition is no other credit bar mortgage can be taken out until the amount is paid off. Help ween the nation off debt. £2m won't make a dent. £20bn is the minimum required.

jonesMUFCforever

jimbo747 wrote: »

I said several months back I'd love to see a govt funded and secured loan paid directly to creditors (for personal debts only), perhaps inflation rate + 0.5% that anyone can take out but cannot be written off in bankruptcy, but the condition is no other credit bar mortgage can be taken out until the amount is paid off. Help ween the nation off debt. £2m won't make a dent. £20bn is the minimum required.

Loans secured on what?

Pixie5740

Exactly what would these loans be secured against?

Is lending people who are not good at borrowing money and repaying it really a good idea? If lenders know that their money will be repaid come hell or high water will that lead to some of the bottom feeder lenders taking on more risky customers?

C_Mababejive

Why should HM Government waste more taxpayers money? They have already wasted enough pouring money into the coffers of housebuilders via HTB.

Dandytf

Whilst I'm finding Help2Save successful

Maybe some kind of Help2RePay could help.

[Deleted User]

jonesMUFCforever wrote: »

I thought they already existed - social loans, who take minute repayments from your benefits?

Crisis loans were removed a while ago. Interest free budgeting loans still exist for the section of benefit claimants who are eligible.

I think money should go to support credit unions - people are much less likely to default if they have to apply in person to a local organisation. I don't think they should be interest free though.

Malthusian

camelot1971 wrote: »

I think money should go to support credit unions - people are much less likely to default if they have to apply in person to a local organisation.

Lost of public money already does go to support them. Credit unions go bust on a regular basis. The Financial Services Compensation Scheme then bails out the depositors (paid for by financial services companies and therefore by their customers, i.e. the general public).

(According to the FSCS' search facility, at least 92 credit unions have gone bust in the last 15 years - I say "at least" because some may not have "credit union" in their name - while there are 292 currently existing in the UK according to the trade body. That's a failure rate of 25% in a decade and a half. If a quarter of mainstream banks failed in a 15-year period, everyone would keep their money under the mattress.)

Public money is therefore already used to allow people to set up credit unions which lend money at artificially low rates to people who can't pay it back. (If they weren't underwritten by public money, the credit unions would not be allowed to take money from retail depositors.) Then when they go bust at a rate of 25% every 15 years, the general public stumps up via FSCS levies.

AIUI, credit union users are less likely to default because they have to save some money first in order to qualify for a loan, which takes some level of personal finance ability. (But enough of them still default that credit unions frequently go bust.)