Mum-of-four Charlene McLaughlin has told how she’s tackled the cost of living crisis by taking on loans.
Former model Charlene, 37, claims she has opted for short term loans for essentials when she knows she can make the repayments. She accepts that her patchy credit history has disqualified her from mainstream lenders.
But she regards not-for-profit enterprise Fair For You as a lifeline for her family. Charlene teamed up with TV star Gail Porter at her home in Cambuslang to promote the funding platform, which has allowed her to buy essentials like a bed, washing machine and tumble drier.
Charlene, 37, said: “I don’t like borrowing money but I will do it if I think the family is going short and I can make the repayments.
“The cost of everything has gone through the roof but there are things that you need just to get through life as a mother and a family.
“When you’ve got four kids, if your washing machine breaks down you can’t really wait until you’ve saved up to buy a new one, so being able to get home essentials through Fair for You has been really helpful.
“Lots of my family are now using Fair for You too, and I’m pleased to hear that they are able to support more households across Scotland.”
Charlene said the Fair For You model suited her as she could make small weekly payments that she could keep control of.
Although the APR for the loans is higher than regular banks, the mainstream lenders refuse to take on the risk of dealing with those with poor credit histories.
Credit unions are used by many people to build up a savings pot and potentially get access to affordable credit (typically at 42.6% APR).
But most of Fair for You’s customers would not get quick access to a loan from a credit union.
Fair For You loans are designed with quick repayment in mind – the 64% APR metric would not make sense in a conventional long term loan framework.
But interest is applied to a diminishing amount whilst the loan is paid back weekly, fortnightly or monthly; whereas APR is a calculation showing interest applied should the loan be repaid in one go after one year
A £250 loan, paid back weekly over 12 weeks would cost £22.19 a week, meaning the interest repaid would be just over £16.
Gail Porter said her own history of surviving mental breakdown, bankruptcy, marital break-up and alopecia allows her top feel true empathy with those facing hard times.
She said: “Once you’ve gone through quite a lot of negativity, like I have, you’re qualified to tell people who find themselves in abject poverty: ‘You’re not alone – this could happen to any one of us.’
“We could all lose our homes, especially nowadays, with the cost of living crisis.
“So many people are worried about whether they will have a roof over their head by the end of the year. Will they be able to afford the bills?
“People have to know that it’s ok to ask for help.”
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Simon Dukes, chief executive of Fair for You, said: “The latest data from Fair4All Finance shows that more than a third of Scots are in financially vulnerable circumstances, and data earlier this year showed that 29% of Scottish households have no savings.
“When people have no financial safety net, they may feel they have no option in a moment of financial stress but to turn to high-cost credit or illegal lenders.
“We’re proud of the support we do provide, and we are helping more and more customers all the time thanks to Social Investment Scotland – and also now thanks to Gail, who is destigmatising the issue of financial exclusion by being so honest about her experiences of appliance poverty and just how hopeless it can feel without the right support.”