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Community financial service saves vulnerable people from high-interest payday loans

Gold Coast single mother Rachel Lewis checks out a washing machine
Rachel Lewis says high-interest payday loans helped at first, but became a struggle.

ABC News: Michelle Rafferty

A new not-for-profit finance service is aiming to help vulnerable Gold Coast residents break the cycle of high-interest payday loans.

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High-interest payday loans were once the only way single mother of two Rachel Lewis could make ends meet.

"At the time you get that loan it helps," she said.

"Then the snowball effect of the next few months of having this big payment and then trying to meet your daily living costs is just daunting."

Ms Lewis said it often came down to a choice between paying the loan, buying food, or putting petrol in the car.

"It is those things that can bring on anxiety or mental health problems," she said.

Ms Lewis is now using Queensland's first community finance store, Good Money, which has opened in Southport Mall.

The not-for-profit organisation set up in partnership with the Queensland Government, Good Shepherd Finance, and NAB offers no-interest and low-interest loans of up to $1,200 to low-income customers.

The money can be used for essential services such as whitegoods, school fees, or medical costs.

Queensland's Domestic Violence Prevention Minister Shannon Fentiman said women with children escaping domestic violence were one of the fastest groups accessing "shonky" payday lenders.

"Let's actually get families who are doing it tough the help they need so they can make better long-term financial decisions."

It is estimated around 100,000 people on the Gold Coast are living on less than $42,000 a year.