St Leger Homes of Doncaster
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Repayments

Repayment Comparisons

We all need to borrow money from time to time. When you borrow money you should always check the rate of interest and how much you will have to pay back in total.

For example, it may be very tempting when you are short of money to accept cash from a doorstep or illegal money lender, you may not even realise the service they offer is illegal. 

You will see from the chart below that you might be paying an extremely high rate of interest without realising it. This means that if you borrowed £400, the amount you have to repay would increase to £4,000 in just one year.

Before accepting any loan, always ask for a clear explanation in writing of the interest rate and how much in total you will have to pay back. Never take out a loan unless you are sure you will be able to pay it back.

It is a good idea to work out your household budget before taking out a loan.

Pay Day Loans

You may also find the offer of an instant loan to bridge a gap until your next payment day. However tempting they may seem, they are a very expensive way to borrow and it's often difficult to manage both the repayment and not need to borrow again in the following month. According to Which?, the average payday lender charges £24 interest for every £100 borrowed if you pay it back within 28 days. An average APR is over 1,300% (which shows the rate of interest you’d pay over a year and may include other charges). Find out more about how payday loans work on the Which? website

Credit card

A credit card is a pre-approved loan so once you've got one you can borrow as much as you like, up to a set limit. However every penny has to be paid back including interest. You need to be wary of minimum repayment arrangements on credit cards as they can cost you more than you think. According to Money Saving Expert, if you owe £3,000 on a typical credit card (with an interest rate of 17.9%) and pay back the minimum repayment amount of £60 (which is 2% of the amount owed) then it will take 40 years to pay the debt at a cost of £6,300 in interest.

Credit unions

Credit unions offer an easy way to save and financial services such as low-cost loans.

The main credit union in Doncaster is the Community First Credit Union. Community First Credit Union have branches throughout South Yorkshire and can be contacted on 030 3030 0010. Visit our Community First Credit Union page for more information.

Repayment comparisons

Use this chart to get an idea of how much interest you might have to pay on different types of loans.

Lender

Amount of Loan

Typical APR

Term of
Loan(weeks)

Weekly Repayment

Total Repayable

Total Interest & fees

Illegal Lender £500 1000% 52 £96.22 £5,003.47 £4,503.47
Mutual £500 104% 51 £13.73 £700.00 £200.00

Provident Personal Credit

£500 299.3% 52 £18.00

£936.00

£436.00

Community First Credit Union

£500 42.4% 49 (+ final of £3.63) £12.00 £591.63 £91.63


To find out how different rates compare for other amounts, use this calculator on the Money Advice website.

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Contact

St Leger Court
White Rose Way
Doncaster
DN4 5ND
Tel: 01302 862862
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