Provident to eliminate home loan business after 141 years
Provident Financial is on the verge of divesting its home loan business after 141 years in business.
Home loans allow providers to grant loans, usually with high interest rates, and then call your home to collect the repayments.
Provident Financial offers these types of loans, ranging from a minimum of £ 100 to a maximum of £ 1,000.
But the high cost credit company is about to get rid of this offer.
The Mail on Sunday reported that the company will seek to collect loan repayments when it closes.
Provident Financial’s online lending business, Satsuma – which offers payday loans – is also set to close.
How to reduce the cost of your debt
If you have a lot of debt this can be really worrying. Here are some tips from Citizens Advice on how to take action.
Check your bank balance regularly – knowing your spending habits is the first step in managing your money
Work out your budget – writing down your income and taking essential bills such as food and transportation
If you have money left over, plan ahead what you will spend or save. If you don’t, look for ways to cut your costs.
Pay more than the minimum – If you have credit card debt, try to pay off more than the minimum amount on your credit card each month to lower your bill faster.
Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritize the more expensive card (the one with the highest interest rate)
Prioritize your debts – If you have multiple debts and can’t afford to pay them all, it’s important to prioritize them
Your rent, mortgage, council tax and energy bills should be paid first as the consequences can be more serious if you don’t pay
Take advice – If you are having trouble paying off your debts month after month, it is important that you get advice as early as possible, before it accumulates even more.
Groups like Citizens Advice and National Debtline can help you prioritize and negotiate with your creditors for more affordable repayment plans.
But the company will continue to run its credit card business, Vanquis Bank, and its auto finance subsidiary, Moneybarn, which had to pay £ 30million last year in compensation to 6,000 customers who took out loans that ‘they couldn’t afford.
The company has not confirmed exactly when it will shut down its home loan business for good.
He also hasn’t said what will happen to clients who are still paying off their loans – but we’ll keep you posted as soon as we know more.
Provident Financial declined to comment.
The news comes as companies including Provident Financial have been feeling the heat of home loans since 2018.
The city’s watchdog, the Financial Conduct Authority (FCA), introduced stricter rules on granting home loans three years ago.
These rules were intended to provide clients with comparative costs for taking out another loan in addition to an existing loan, so that they could see the total cost in advance.
The crackdown marked a huge victory for The Sun’s Stop The Credit Rip-Off campaign, launched to help the millions of Britons who fall prey to high-cost loan providers.
The Sun spoke to families who spent years repaying these loans with extremely high interest rates.
The FCA also warned later that year that providers could have to pay compensation for millions of Britons who were offered unaffordable loans.
The warning came as complaints about such loans reached an all-time high in 2018.
But earlier this year, it was revealed that Provident wants to limit the amount of compensation borrowers can claim for poorly sold loans.
He said he plans to create a pot of £ 50million to make payments to those allegedly on loan irresponsibly.
But that was less than what the claims were actually worth.
If you’re struggling to pay off your debt, it’s worth seeking help from organizations like Citizens Advice and National Debtline.
They can help you prioritize and negotiate with your creditors for more affordable repayment plans.
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