Thrifty Loans

In the current financial climate there are many people who are getting caught short financially, with an unexpected bill or expense that they had not accounted for and do not have the money to pay for. In the past many would turn to overdrafts or credit cards in order to cover such expenses but in the current climate there are many people who are being turned down for this sort of finance.

As a result of this many people are turning to payday loans in order to get their hands on some fast cash to tide them over until they get paid. One industry expert has, however, warned that this is a very costly method of borrowing and should only be considered in extreme emergencies. There are concerns that whilst some people are using payday loans as they should be used – in an emergency – others are simply using them on a regular basis to get money to go out on the town because they have run out of cash until payday.

Officials have said that for those that are unable to get finance from a traditional lender it is far better to go to a payday lender than to consider one of the costly doorstep lenders or unlicensed loan sharks that are out there. However, they are warning against abuse of the payday lending market by consumers who see it as an easy way to get cash that they do not even need all that desperately without thinking about the consequences in terms of the interest that they will pay.

One official said: “Many people turn to payday loans now and again in times of financial desperation, which is fine. However, others use these loans all the time in order to get extra cash, which can end up costing a fortune.”

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4. House to vote over caps on payday loans
5. Payday problems leading to higher debt levels