Payday loans under investigation
31/07/08
Payday loans could be a thing of the past if lobbying groups have it there way. Many action groups are strongly lobbying for a stop on pay day loans and their providers. The investigation headed by the Office of Fair Trading (OFT) is looking into payday loan providers who are charging through the roof interest rates for the lending. Research uncovers that some payday loan providers charge 2500% interest rates.
The market is now faced with a situation that could either force payday loan providers out of the industry or be imposed with some serious responsible lending terms to protect the consumer. The UK market has many payday loan providers and majority have found there way from overseas, mainly from within the US due to capping laws imposed on similar practices.
Payday loans statistics for the past few months certainly shows high levels of activity for the number of applications processed and approved. These worrying figures really do strengthen the impact of the credit crunch where people have to turn to short term loans at phenomenal rates of interest to sustain their day to day living.
Many specialists urge those in financial difficulties to look at and exhaust all possible loan options before turning to a payday loan.
