Loan sharks target poorest households with 825% APR loans

Thousands of households have taken out loans with interest rates averaging 825% during ‘the worst Christmas in a generation’ for illegal doorstep lending, according to a new report. ‘The Real Cost of Christmas’, commissioned by affordable housing provider Circle Anglia and written by the Financial Inclusion Centre, found that more than 100,000 of the UK’s poorest families will spend 2010 crippled with a combined debt of around £82m after borrowing money from loan sharks to pay for Christmas. The value of the loans is an estimated £29m, but average interest rates of 825% will mean that people end up paying nearly three times the initial amount they borrowed.