The Citizens Advice Bureaux (CAB) has warned that a number of people are falling foul of fake loan scams in a bid to boost their finances.
A safer way for homeowners to pay off their debts or increase their spending power could be through the use of an equity release plan, which would let them utilise some of the value of their property.
CAB director of policy Teresa Perchard said that many people are being taken in by firms requesting set up payments of between £35 and £2,000 for loans which then fail to materialise.
“In the recession loans can be hard to get and people falling into debt or unable to get mainstream credit are being targeted with ads and direct contacts offering loans that really are too good to be true,” she said.
“Our advice is that once you’ve parted with your money there is little chance of getting it back, so we urge people to be very wary of signing up for loans that require a payment upfront – the chances are this is a scam.”
Another way homeowners aged over 55 years can pay off debts is by taking out a lifetime mortgage, which can provide them with a tax-free cash lump sum taken from the value of their property.
Posted by Tom Papworth
