Increase in take up of payday loans
According to a recent report there has been an increase in the take up of payday loans, and officials state that this reflects the difficulties that consumers are facing when it comes to affordability and when it comes to getting finance from a more mainstream source, such as loan and credit card providers. One charity has said that the increase in the take up of payday loans also shows how deep seated Britain’s debt problems have become.
Payday loans offer short term loans to those in employment. The loan amounts are usually very modest, with most offering up to around £1000 – although this is subject to income and financial status. The interest charged can be very high, although it is usually taken as a flat amount per £100 borrowed. The loan has to be repaid within a 30 day period, although some payday lenders will allow you roll the loan over the next month providing you pay the interest charges again.
Recent figures have shown that the take up of payday loans such as these has rocketed by around 55% since September of last year, and unsurprisingly this is around the same time that the global credit crunch took a hold in the UK. Many people may have found themselves turning to payday loans simply because they were unable to access any other options when it came to getting finance, but for many this could be proving an expensive decision.
One official stated that consumers need to try and manage their finances more effectively, stating: “Are you paying out more than you get in each month? If you are, then you need debt advice, to see where you can make cutbacks. You may need to negotiate smaller payments with your creditors…or your mortgage lender.”
