Payday Cash Crunch - Payday Loans and Same Day Fast Cash

Writing by Paul on Tuesday 8 April 2008

The New Consumer Credit Crunch? Payday Loans for Sameday Cash Prove Very Expensive

As creditors begin to reduce the amount of money available to consumers for mortgages and loans, many UK households are applying for credit from quick payday loans services to provide short term fast money to help meet their expenditure commitments.

Payday advance loans, an American import, have seen a boom in business in the UK since the beginning of the worldwide credit crunch, recent rises in the cost of living and mortgage rates. Unfortunately, they don’t come cheap, and often hide an underlying debt problem.

During an interview for BBC Radio 2, John Fairhurst from Payplan, the free debt advice organisation said:

“Often the sums are quite small, just a few hundred pounds, but the interest rates charged are enormous. A thousand per cent APR is not uncommon.”

At these rates, for every £100 borrowed, debtors could be paying back an extra £25.

John Fairhurst explained that for someone who was employed and had a cheque book bank account, ‘instant cash advance loans’ or ‘payday loans’ were relatively easy and straightforward to obtain. He said:

“…you can walk in, write a post-dated cheque for payday for the amount and interest and walk out with the cash.”

The problem with short term loans or ‘quick money’ from payday loan companies is that once a person becomes reliant on same day cash loans, their debt problem can spiral out of all proportion to the original amount that was borrowed.

For those that are struggling to meet their bills and pay their mortgages, rent and council tax, payday loans cannot be the best way forward. Payplan, who offer free debt advice and free debt management plans, can also offer budgeting advice to enable debtors to prioritise their costs and help deal with their debts without the need to rely on emergency cash advances from payday loan companies.

Call Payplan free on 0800 9177823 or, submit your details confidentially online using their Debt Calculator or Quick Debt Enquiry.

Filed Under  Financial News, Personal Finance, UK Debt News  |  Trackback

Comments

One Response to “Payday Cash Crunch - Payday Loans and Same Day Fast Cash”

  1. Jennifer on April 12th, 2008 11:00 am

    Very good post and good information, I’m always reading your articles and always appreciate them

    Best Regards
    Jennifer

Leave a Reply