A mom finds herself in crippling debt after the holiday season, having taken out thousands in loans to buy her children Christmas presents.
Many families begin the New Year with financial strain after a month of gift-giving. For Katie McGill, 28, the pressure gauge is reading higher than most.
McGill borrowed about $2,780, from easy money lending firms to purchase “hundreds” of Christmas gifts for her children. The unemployed mother of two faces a debt of almost $5,000 to start paying back Jan. 2.
She is blaming the lending companies for what she sees as predatory practices.
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“It’s stupid because I’m on benefit and there’s no way I can afford to pay it all back,” she told the Mirror.
“When I first started taking out loans I was in a stable relationship and me and my partner both had jobs, meaning when it came to pay day we could pay back what we owed.”
“But now I am on my own and unemployed. [Lending company] Wonga haven’t looked into my change of circumstances though and they’re still allowing me to borrow.”
McGill’s gifts to Mya-Renee, three, and Calvin, eight, included a bike, TV and DVD player for both kids, several Xbox games and a meal out.
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“There were hundreds of presents under the tree,” the single mother told the Daily Mail. “Their gran passed away this year so it was nice to be able to treat them.”
Now, though, McGill isn’t sure how she’ll cover repaying the multiple loans that she took out from eight different companies.
“When I start paying back the loans I won't be able to pay the bills or buy food and drink and basic necessities,” she said.
She called the loans from the company Wonga “one big, messy, circle,” as the company encourages loan seekers to continue to take out more loans to account for the last ones. A spokesman for Wonga said it’s only possible to take out one loan at a time.
McGill has no job and is using unemployment benefits to provide for her household, and now, to pay off thousands in Christmas presents for the kids.