'Checks needed' to stop My Home Finance scheme creating debt problems
'Checks needed' to stop My Home Finance scheme creating debt problems
- Monday, 27 September 2010Appropriate checks and balances are required to ensure the My Home Finance scheme does not lead to further
debt problems, it has been insisted.
The new government initiative aims to stop financially excluded people from turning to un-regulated forms of lending by allowing them to borrow small sums of around £500, repayable weekly.
However, the
Debt Advice Foundation said that measures will need to be put in place to ensure that borrowers can afford repayments if they are to be protected from falling into further
debt problems.
David Rodger, managing director of the charity, said: "The main factors that need to be taken into consideration whether a family can afford the repayments in monetary terms and whether there is a more appropriate solution for them."
Secretary of state for work and pensions Iain Duncan Smith announced the My Home Finance scheme last week, at the National Housing Federation's annual conference.
He said that the loans will carry APRs of 29.9 per cent, contrasting to the rates charged by unregulated lenders and loan sharks, which can often be as high as 2,000 per cent.

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