Ireland’s Guide To Money And Living

Consumer watch – think twice about moneylending

Consumer watch Stuart MilesThe Central Bank of Ireland has issued a warning about moneylending firms.

Research conducted by the bank last year highlighted that one in five consumers took out a new loan before they paid off the previous one. 27% per cent of these said that they took out the new loan to pay off an existing one. Moneylenders typically charge high rates of interest, which makes loans quite difficult to pay back. For example, according to the Central Bank’s register, one such lender in Finglas offers an APR rate of 183.67%. The same rate of another firm in Cork is 187.22%. A list of moneylenders operating in Ireland is available here.

Director of Consumer Protection, Bernard Sheridan, said: “Households often have additional expenses at this time of year, and consumers could be tempted to take out additional loans to cover these expenses, including from moneylending firms. This could take consumers into a rolling cycle of high-cost borrowing and potential debt, especially given the high-cost nature of moneylender loans, when compared with loans from banks and credit unions.”

Sheridan also advises that anyone who does take out an additional loan from a moneylender should ensure the company is registered with the central bank – registered moneylenders are prohibited from

For anyone in financial difficulties, the Money Advice and Budgeting Service (MABS) is a great, free resource, offering a self help guide, a budgeting tool, and information on debt relief, personal insolvency and more.

In other news, research commissioned by St Vincent de Paul has shown that improvements in a home’s energy efficiency levels are vital. The report noted that energy prices have risen by 25% over the past five years, and that people living in energy inefficient homes can pay €4,000 per annum to keep them adequately heated.

The report also stressed that policy change in relation to income adequacy is a vital step in helping households meet their energy requirements.