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Debt pushing public towards payday loans

12/15/2011

Insolvency expert R3 has revealed that 7 per cent of the people it surveyed will consider taking out a payday loan in the next six months.

According to the Personal Debt Snapshot – 60 per cent of people are worried about their current level of debt, an increase from 39 per cent the same time last year and the highest level recorded by R3 in six surveys.

Seven per cent more people are struggling to make it to payday than last year the study found, as figures hit 45 per cent.

The rising debt figures which are likely to push more people into taking out payday loans are concerning, with these short-term and unsecured loans charging around the 1,000 per cent APR mark. If these debts are rolled over, the amount owed can increase rapidly.

Frances Coulson, President of R3, said: “Payday loans are not the best way to resolve debt struggles. We know that many who take them out find them to be a negative experience, often escalating financial troubles.”

Categories; Current UK Economy, Income Worries and Debt, Debt Management and Banking,