Britons who do not have access to affordable credit are using expensive doorstep loans to pay for Christmas.
The Housing Corporation says Britons will pay £37 million too much on interest payments for such loans while the poorest families will be worst affected.
The corporation says people pay as much as 600 per cent for doorstep loans while those relying on loan sharks could be paying much more.
"At Christmas, every parent is under the same pressure to make it special for their children. But if they borrow from doorstep lenders, they risk the roof over their heads in return for a day's happiness," said Jon Rouse, chief executive of the Housing Corporation.
The Housing Corporation said that doorstep lenders charge as much as 497 per cent, meaning it would cost £201.68 to repay a £137 loan.
The coporation says people should take advantage of their debt advice and consider credit union services and more affordable finance options before resorting to doorstep loans.To read more about Understanding Loans, click here.
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