Consumers need more choice as well as a payday loan cap

[Legal Beagles]

Citizens Advice Chief Executive Gillian Guy said: “Up until now, payday lenders have had the green light to send people into a spiral of unmanageable debt. High interest rates and excessive charges have made small short-term loans balloon to long term debts worth thousands. “The cap will help limit the scale of debts but its […]

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[PAWS]

Re: Consumers need more choice as well as a payday loan cap

Citizens Advice Chief Executive Gillian Guy said:
For some people who are already struggling, instead of another loan,access to free, independent and impartial advice would help people get on topof their finances and its important lenders are pointing would-be borrowerstowards this help.”

I do agree that there are people in serious debt who do need advice but reports have shown that people in debt are just as capable of budgeting as everyone else. Actually more so in some cases through necessity.
If debtors fill out an income and expenditure form or get advice about negotiating with their creditors it does help; no doubt about that but as we can see from hundreds of posts on LB and other sites that is no good if the lenders and Debt collectors still haul them up in front of the courts.
If there is more money going out then coming in all the advice in the world will not change that and when there is a crisis the debtor has two choices; the sub primes or the pawn shop.
As I said before a pay day loan is never the first debt someone will have. They turn to them because all their ‘spare’ income has to goto appease their initial creditors. Often these are DCAs who only paid pennies for the debt in the first place.