You are here: Home - Credit Cards & Loans -

Payday loans increasing in popularity

0
Written by:
16/05/2008

Research from Moneysupermarket shows the take-up of short-term payday loans has seen a massive upswing, increasing by over 55% since September.

The price comparison site said the rise in payday loans is astronomical and symbolises just how difficult people are finding it to cope day to day. As disposable income is being squeezed through increases in the cost of food, fuel, utilities and general living necessities, these loans are being increasingly used to help those on a tight budget.

Tim Moss, head of loans at Moneysupermarket, said: “Payday loans can be useful as a short-term credit vehicle. They are a bit like taxis – convenient for short journeys, but if you are going a long way, there are much cheaper ways to travel.

“They should only be taken out when it’s absolutely necessary and you are sure you can pay it back quickly. Anyone looking for longer term credit or unable to pay off the debt immediately, should steer clear of them. It would be wiser to borrow the cash from family or friends or arrange an authorised overdraft with your bank.

“Payday loans have a maximum term of 30 days, with a typical interest rate being 25% per month. Borrowing £80 for a month and repaying £100 is a better deal than going into your unauthorised overdraft.

“Of course, the best solution is to sit down and analyse everything you are spending your money on: Are there any potential savings you can make and is all of your spending essential? Then get in the habit of making regular contributions to a high-interest current account, so there is always money available should you need it.”

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Debt and savings used to combat rising cost of living

More than half of retirees are struggling to make ends meet thanks to the rising cost of living, according to...

Close