Young borrowers are more likely to use payday loans and not be aware of “affordable” credit unions.

Young adults are twice as likely to turn to high-interest payday lenders as they are to nonprofit community lenders, finds research from the government-supported Pensions and Money Service.

Friends and family were the number one source of loans for the group aged 25 to 34, with 26 percent saying they would turn into “close contacts”.

Meanwhile, 19 percent said they would consider payday lenders or other high-cost short-term credit if needed.

Only 5 percent of those asked said they would consider borrowing from not-for-profit lenders such as credit unions.

There are 7.7 million financially vulnerable adults in the UK and almost half of them are between the ages of 25 and 34.

There are 7.7 million financially vulnerable adults in the UK and almost half of them are between the ages of 25 and 34.

Furthermore, not-for-profit financing organization Fair4All estimates that there are 7.7 million people ages 18-34 in financially vulnerable circumstances, which is roughly half of the 17.6 million people living in such circumstances.

Lauren Peel of Fair4All Finance told This Money: “We’re seeing people who really feel like they’ve cut back on their spending and are still overdraft every month.

But they do have goals and ambition about where they want to live and what jobs they want.

Many of them are rented and this is not always a stable market. People worry from year to year about the increase in rent.

What are credit unions and community lenders?

Credit unions are financial cooperatives that provide savings, loans, and a range of other services to their members. In order to join, credit unions usually require members to be part of a joint bond, such as living in a specific area or working for a specific employer.

However, you may not always have to be an existing member of a union in order to use its services.

These organizations are often able to lend money to customers on better terms than other lenders, and have schemes to help more vulnerable borrowers who may struggle to obtain credit elsewhere.

Victoria Barry, 36, was entrapped by payday lenders in her early 20s but with the help of a credit union was able to pay off her debts and is now a homeowner.

Victoria Barry, 36, was entrapped by payday lenders in her early 20s but with the help of a credit union was able to pay off her debts and is now a homeowner.

Victoria Barry fell into a vicious cycle of using high-cost payday loans in her early twenties.

Speaking with This is Money, Victoria, 36, from Manchester says she initially borrowed just £20 from a payday lender after a friend recommended her to fund a night out at the end of the month. However, due to the high interest charges, Victoria continued to supplement her salary with loans at the end of the month.

It got to the point where she was paying almost her entire salary back to my payday lenders on a monthly basis and then had to take out another loan to live on. The crisis point came, she says, when her loans outpaced her earnings.

“The next payment will be money I didn’t have in my account,” she recalls. I was only getting paid £10,500 and a month before that I was borrowing £700. With the £150 interest I had no way of giving them that money.

At the time, Victoria was working in cooperative insurance and noticed advertisements for the Cooperative Credit Union, which is open to members of a range of co-operative organisations, on her workplace intranet.

It was very shameful, my family is not tied into debt, so I felt like I had been let down by people and I didn’t want to turn to them. I saw him [credit union adverts] On the intranet and I thought I’d give this a try.

It was very shameful, my family is not in debt and I got out of it, so I felt like I was let down by people and I didn’t want to turn to them

She says she was worried employees at the union would tell her she mismanaged her money, but when she met a counselor face-to-face, they were reassuring and helpful.

They provided her with not only an affordable payment plan but also financial health tools, such as budgeting skills, so she could manage her money.

“Nobody tells you your budget and that’s really simple, that’s where the money comes in and that’s what you can spend,” says Victoria who now owns her own home in Mossley, Greater Manchester.

It was a case of someone listening to you and not judging you and it was the most important thing to me at the time.

Looking back on that time period it seemed like there was no hope so I am happy to share my story because if someone like me hears that there is someone out there who can help you who is not a loan shark or pay lender today then it will be worth it.

What can you do if you need credit?

The first thing Bill suggests is checking if you’re entitled to any benefits you’re not already claiming.

There are online tools to see if you can access other sources of income. It is estimated that around £15 billion in interest goes unclaimed annually.

When credit is needed don’t be shy, she says. Just make sure you do your research and connect with financing providers who can help find you a lower cost option.

High-cost payday lenders are often at the top of search engine results, so take your time to search a little further to see what’s available at reasonable rates.

Victoria Barry echoes the message that you shouldn’t be ashamed if you’re experiencing financial hardship and ask for help.

She suggests talking to a credit union, but even if they can’t help you, they will be able to point you in the right direction for alternative sources of help.

“Asking for help is the first step,” she says.

One in six adults (16 per cent) say they feel too embarrassed to ask for help when they are experiencing financial difficulties, according to research from Bluestone Mortgages.

However, the biggest barrier to getting advice is that nearly a third (31 per cent) do not think they qualify for help, while more than a fifth (22 per cent) say they don’t know where to start looking for support.

To raise awareness, credit unions and other community lenders are encouraging young people in their 20s and 30s to consider their credit options and to consider options available to them through a range of local and national community lenders that may suit their financial circumstances.

They can be found at Find Your Credit Union – credit unions near you and Find Finance – responsible financing providers that offer simple and affordable loans.

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