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Calls by Consumer Focus to bring in more safe guards to protect vulnerable borrows are welcomed by Payplan.
Payplan, a free debt advice and solutions service that provides impartial advice to people in financial difficulty have welcomed Consumer Focus’s calls to the payday loan industry to bring in more safeguards to protect vulnerable borrowers.
Research conducted by Consumer Focus suggests that around 1.2 million people are taking out a payday loan every year, borrowing a total of £1.2 billion. This shows a significant increase since 1996, despite some companies charging interest rates of more than 2,500% a year.
Payday loans are increasing in popularity and provide the borrower with quick access to low-level short-term credit. They are usually repaid monthly on the borrowers’ payday.
John Fairhurst, Managing Director at Payplan said “Payday loans are a better alternative than turning to a loan shark but the eyewatering interest charges can mean borrowers end up owing more and more as payments spiral out of control,”
“We agree more should be done to make people aware of the long-term consequences of a payday loan. It might appear to provide a short-term solution but we often see people drawn into repeatedly taking out these expensive loans to try and keep up with unaffordable repayments to other creditors. Instead of improving their situation people often find that use of these loans exacerbates an already serious debt problem.”
For more information visit the Payplan website.
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Payplan, a free debt advice and solutions service that provides impartial advice to people in financial difficulty have welcomed Consumer Focus’s calls to the payday loan industry to bring in more safeguards to protect vulnerable borrowers.
Research conducted by Consumer Focus suggests that around 1.2 million people are taking out a payday loan every year, borrowing a total of £1.2 billion. This shows a significant increase since 1996, despite some companies charging interest rates of more than 2,500% a year.
Payday loans are increasing in popularity and provide the borrower with quick access to low-level short-term credit. They are usually repaid monthly on the borrowers’ payday.
John Fairhurst, Managing Director at Payplan said “Payday loans are a better alternative than turning to a loan shark but the eyewatering interest charges can mean borrowers end up owing more and more as payments spiral out of control,”
“We agree more should be done to make people aware of the long-term consequences of a payday loan. It might appear to provide a short-term solution but we often see people drawn into repeatedly taking out these expensive loans to try and keep up with unaffordable repayments to other creditors. Instead of improving their situation people often find that use of these loans exacerbates an already serious debt problem.”
For more information visit the Payplan website.
More...
