Debt problems – payday loans
15/03/2011Once again British consumers struggling against debt problems have been told to avoid resorting to the lending offered by payday loan companies, as this could lead to making their situation even worse.
That's because thisismoney.co.uk reports this week that some of these payday lenders charge levels of interest that equate to as much as 4,000% APR to people who borrow from them.
And several MPs have urged caution against consumers engaging with such firms.
Recent months have seen a surge in the presence of these companies across the country, as the UK is currently not regulating against them to the extent that other countries do.
The Labour MP Stella Creasy has lodged a Private Member's Bill companies such as these which continue to worsen the debt problems of so many people.
She says: "They are lending people a huge amount of money that they haven't got a hope of paying back.
Ms Creasy goes on to say that "every day we fail to take action on this is another day when debts are piling up."
Debt solutions expert, Kevin Still says "Payday loans are intended to be short term advances to cover a gap between you potentially exceeding your overdraft and next pay day.
Loans of several hundred pounds can quickly escalate creating a debt spiral with several lenders and it becoming a recurring requirement, which is when these huge APRs really bite and debt problems generally get worse." 
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