Doncaster residents who use some of the town’s many pay day lenders, are set to welcome a new cap on the cost of loans.
New rules on pay day loans have come in to effect today, and mean the rates will be capped at 0.8 per cent per day of the amount borrowed, and no-one will have to pay back more than twice the amount they borrowed.
The Financial Conduct Authority (FCA) said those unable to repay should be prevented from taking out such loans.
Many money shop outlets have sprung up in Doncaster over the last few years, with over 10 based in the town centre alone.
The Free Press has previously reported on how some of Doncaster’s most vulnerable residents had got themselves into crippling debt through the use of pay day lenders.
Doncaster Mayor, Ros Jones, and Labour leader and Doncaster North MP, Ed Miliband, are among a number of figures in the town who have called for tighter regulations for pay day loan businesses.
The changes also mean that if a borrower defaults, the interest on the debt will still build up, but he or she will never have to pay back interest of more than 100 per cent of the amount borrowed.
There is also a £15 cap on a one-off default fee.
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