Payday loans on the increase
24/03/09
According to new research the number of people having to resort to applying for expensive payday loans has increased significantly over the past few years.
Payday loans often have very high rates of interest as companies offer the money at short notice. Payday loans are mostly for people who run out of money before the month end, usually when salaries are due to paid so are used for short tern cash flow problems mostly.
“Payday loans are the ultimate barometer of how tough things are,” head of loans at finance website moneysupermarket.com, Tim Moss.
He continued, “The alarm bells for the economy started ringing just over a year ago when the number of applications for payday loans suddenly went through the roof.
“By last August, the typical number of people seeking these loans had more than tripled compared to 2007.”
Many of these loans charge anything around £20 and £50 for a loan value of around £150. If this was the case then interest rate on such a loan would be over a staggering 1,000%.
