A new, national survey has identified a rise in the number of parents in debt due to back-to-school related costs.
Well over a third of parents in Ireland (36%) now say they are getting into debt trying to cope with costs at back-to-school time.
This compares with 29% who reported being in debt last year. The worrying findings were revealed in the study commissioned by the Irish League of Credit Unions.
More than two thirds of parents in the study also said that they found back-to-school costs a financial burden. Nearly half (46%) said meeting costs was their biggest back-to-school related worry.
Close to one third of parents said they would be forced to deny their children certain school items this year because they could not afford them. Extracurricular activities and new school shoes were amongst the items to be cut from the budget this year.
Reacting to the findings, Gordon Randles, CEO of Letterkenny Credit Union said that the credit union is all too aware of the struggle for parents this time of year. “We do see parents approaching us around this time of year requesting assistance with either budgeting or saving for the back-to-school spend, or with taking out a loan to see them through.
“It’s understandable that back-to-school costs are seen as a financial burden for so many when parents are paying out €999 for every primary school child, and over €1,300 for every secondary school child in their household.
“At Letterkenny Credit Union, we offer a special Back to School loan with an affordable APR rate of 7.2%*. The loan is typically approved within 24 hours and there are no hidden transaction fees or charges. As always, we are happy to work with parents to structure repayments in a way that suits their individual circumstances.”
One concern for the credit union was the finding that, of those parents who said they were getting into debt, more than a quarter (27%) said they had turned to a moneylender in an effort to cope with back-to-school costs. This was a noticeable increase on the 20% last year who had opted for a moneylender.
Commenting on this finding, Gordon said, “I would really encourage these parents to reconsider approaching a moneylender, some of whom charge APR rates as high as 188%**.
“This can lead to a recurring cycle of unnecessary debt and panic borrowing. Our welcoming staff are always on hand in the credit union to talk through borrowing options with any parent in the local community who might need assistance, whether they be a new or existing member, and equally if they have never dealt with the credit union before.
“We are more than happy to assist anyone who might need a little extra financial assistance at this time of year.”
* For a €1000, 1-year variable interest rate loan with 12 monthly repayments of €86.52, an interest Rate of 6.95%, a representative APR of 7.2%, the total amount payable by the member is €1038.23. Information correct as at 16/07/2019.
** Central Bank of Ireland Register of Moneylenders, July 2018.
-ENDS-
For further information please visit our website: www.letterkennycu.ie or contact Letterkenny Credit Union on 0749102126 or email loans@letterkennycu.ie
