Debt consolidation increase expected after Christmas spending rise says local credit union

CLEVR Money, the credit union which provides ethical savings and loans to people living on the Fylde Coast, is anticipating a high demand for debt consolidation loans in the new year following increases in Christmas spending.

The not-for-profit community focused organisation based in Birley Street, has seen a steady increase in the number of debt consolidation loans over the last year, whereby customers roll multiple debts from different sources into one monthly payment.

CLEVR has provided 117 debt consolidation loans over the last year, for a total value of £527,000. This is up £85,000 from the 77 loans handed out in 2020 valuing £343,000.

A spokesperson for CLEVR Money said that they believe records will tumble in the new year with the credit union helping more people than ever with debt consolidation loans.

They said: “I expect debt consolidation to be high on the agenda as people look to sort out their finances after Christmas. Our own figures this Christmas show members have saved more for the festive season, while our Christmas loans are also up in value, indicating people are spending more this year than last. This trend will be reflected in the wider community and, for those who haven’t borrowed from a credit union, their repayments may start to cause sleepless nights in the new year.

“People come to us with debts from numerous sources like credit card, store cards, shop instalment, and payday loans. They often say they wish they’d taken a fair interest credit union loan in the first place, but at least we can help them once they do get in touch.

“The biggest barrier to people contacting us is they assume we won’t be able to help them because they’ve already been turned down elsewhere, or they are embarrassed or too scared to lay it all out on the table. All I can say is that this is exactly what we are here for, to help people access fair credit, avoid high interest rates, sleepless nights and bad debt. We helped 117 people pay off their debts last year, and we can help many more in 2022.”

CLEVR Money released almost £130,000 from members’ Christmas savings accounts in November, up £11,000 from last year, showing people saved more for the festive season.

It also handed out almost £514,000 in Christmas loans this year, up £60,000 on Christmas 2020 when locals borrowed a total of £453,000.

The increase in both savings and loans is down to both a greater appetite to make the most of the festive season, and his team’s growing presence in the community, according to a CLEVR Money manager.

They said: “We were delighted to see the Christmas Savings increase, showing people have put away more than ever before to cover the expenses of the festive season. And the increase in loans is also good as it means people who have to borrow, are doing so with a responsible and reputable lender like ourselves rather than payday loans companies or loan sharks.

“We’ve also worked really hard to stay visible in the community despite Covid shutting the branch doors and preventing our community face-to-face sessions. These figures show we have successfully continued to serve our existing members and have attracted new members via word of mouth recommendation and our online campaign, ensuring people in our community can still access the fair and affordable loans we provide just for them.” The prospect of a better Christmas than 2020, and the fear of another lockdown have both spurred Christmas spending says a spokesperson.

“Some people are spending more to make up for lost time, while others are buying bigger gifts to make up for not being able to see people. And some people have more to spend simply because they’ve not been able to go on holiday this year. Whatever the reason, the credit union is here to help support people in this community with a great savings scheme and access to fair and affordable loans.”