Record Level of Interest Free Loans Approved

Mon, 21 Sep 2009

The government lent £170 million in crisis loans to hard up families in the last financial year. A record 1.7 million loans were approved in the 12 months leading to April 2009 in England and Wales, an increase of 46 per cent on the 1.1 million issued in the previous year. There was a similar increase in the amount lent, which rose from £121 million in 2007-08 to £167 million in 2008-09.

The crisis loans of up to £1,500, which charge an interest rate of zero per cent, are available to adults in financial ruin with no savings, no chance of securing a personal loan and no other means of repaying debts .

The loans were introduced in 1988 for emergencies or disasters, and have become vastly more popular following the economic downturn. The Department for Work and Pensions (DWP) has had to employ an extra 900 assessors in the past year to cope with applications, taking the total number employed to 2,200.

In order to obtain a loan, applicants must be able to agree a repayment plan with an assessor. The average payment is just under £100, and must be repaid within two years.
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