Northern Community Bank recently caught up with an account holder to discuss credit and mental wellbeing after they got into a mess with a doorstep lender and the high cost pay weekly stores.
I have no idea how I managed to keep paying the amount I was weekly
For a year and half a friend had been advising Ellen* to contact Northern Community Bank to discuss whether the Community bank would be able to help with the repayments that were in her words ‘causing sleepless nights’.
A report by the Royal Society For Public Health (RSPH) called ‘Life on Debt Row’ published their findings examining the effect of debt on health and wellbeing. The report includes a league table of credit types according to their impact on people’s mental health. Community banks proved to have the least serious impact on mental wellbeing, while payday loans, unauthorised overdrafts, doorstep loans and weekly payment stores proved to have the worst effect on mental wellbeing.
Ellen was paying the most well-known doorstep lender in the UK £126 per week, whilst paying £36 per week to a pay weekly store. At the time Ellen’s weekly income was £210.
Once Northern Community Bank had chance to talk to Ellen, we soon realised that helping her to cut ties with the pay weekly store would leave Ellen in a much better financial situation.
Ellen was shocked when Northern Community Bank produced a quote for the £500 bed and mattress combination. Enquiring about a loan with repayments continuing at £36 per week would result in a total cost of credit of under £530! At that point Ellen asked us to look at consolidating her doorstep loans.
A Northern Community Bank member of staff worked out how much Ellen owed the doorstep lender; went through income, expenditure and performed a credit check to establish whether the loan was affordable. Our credit committee made the final decision to grant the loan, the doorstep lender was paid directly from Northern Community Bank. Looking back Ellen said she believes this discussion with Northern Community Bank changed her life.
Speaking to Ellen recently really brought home for staff at Northern Community Bank how by offering an ethical alternative to high interest credit lenders we can enable people in our community to make positive change. Ellen, who no longer needs the support of the Food Bank.
This Christmas I was able to buy my daughter’s Christmas present with cash for the first time in a number of years. Just before Christmas my cooker packed in, I had saved enough cash to replace it and buy my daughter a television as a present. Thank you – at the end of each week I now have money to save for anything that might pop-up
It was hugely satisfying to read recently how Community banks were rated highly by account holders surveyed by the Financial Inclusion Centre report ‘An Insight into Credit Union Membership’. At Northern Community Bank we strive to provide the best possible service for the account holders who own Northern Community Bank. The research found
- 88% thought their Community bank provided good/very good value services
- 81% were extremely/very satisfied overall with their Community bank
- 84% would recommend to a friend or family member
These findings support Ellen’s view when we finished talking recently
I tell everyone about Northern Community Bank. The Community bank has helped me get back to normal, I have my finances under control and I am saving at the same time.
If you would like to discuss your borrowing needs, whether you are in a cycle of door step borrowing or you feel you have no options other than the pay weekly stores for white goods and furniture, then contact Northern Community Bank today
*We have changed the name of the account holder
