High interest loans can be devastating for struggling families

MACKAY families desperate for a quick financial fix have been providing a brisk trade for short-term money lenders.

Professional financial planners say many families risk losing their rented homes as their debt mounts.

They advise against entering such costly agreements and say residents under financial stress should seek out better alternatives for help through the free services of community agencies.

High interest "pay day" bridging loans can be devastating to low income families or struggling mums and dads on single parent benefits.

When they fall behind on repayments some borrow more money.

The high interest rates can stretch over 900% and the borrower can be left financially crippled as lenders have first bite at any income in their bank account.

Little money is left to pay for food and meet rent or electricity bills.

The problem has led to a demand by Mackay's battlers for professional financial advice.

Not-for-profit agencies have engaged financial counsellors to deal with people floundering under financial debt and who risk losing their rental homes.

Free counsellors such as Mark Phillips get them back on track so they don't lose their homes.

The financial counsellor works at the HomeStay program run by CASA (Community Accommodation Support Agency).

Mr Phillips confirmed he dealt with many cases of residents behind in their rent payments, who faced mounting debt after losing their job, through illness, over-use of credit cards or personal loans for cars.

Mr Phillips said "consumer leases" for electrical or whitegoods, computers and furniture, where the buyer can end up paying three times the value of the goods, were also a cause of hardship when repayments combined with other demands.

"Yes, a lot are in danger of losing their homes," he said.

"My role is to keep them in their home, to stop their family being evicted and improve their finances," he said.



REVEALED: Plans for ‘new generation’ boarding house in Coffs

Premium Content REVEALED: Plans for ‘new generation’ boarding house in Coffs

Plans lodged for ‘innovative’ boarding house with micro-apartments.

COVID SCHOOL RULES: Find out what’s changed

Premium Content COVID SCHOOL RULES: Find out what’s changed

From Monday, parents and schools across NSW will have a new set of coronavirus...

COVID-19: Payment plans for renters announced

Premium Content COVID-19: Payment plans for renters announced

Renters losing temporary relief could be a “ticking time bomb”.