Rise in Payday Loans

It has been found that more and more people are turning to short-term loans to tide them over until they get paid.

Figures found for The Times have shown that the number of payday loans that have been taken out has doubled in the last ten months as shoppers are finding it difficult to cope during the credit crunch.

Increasing prices for fuel and groceries has meant that lenders offering short term loans have found their business become a lot more popular to customers who are struggling to keep up with the price increases.

According to a leading price comparison website, sales in payday loans have risen by more than 130 per cent since August last year. In the US, payday loans have been very popular and have been blamed for the problems they are having with housing there at the moment.

Payday lenders in the UK will offer loans up to the amount of £1000 and one UK lender will demand that £125 be repaid for a £100 loan or £937.50 for a £700 loan. A payday loan is usually paid off within a couple of days, once the customers wage has been paid into their account. This annual percentage rate (APR) is pretty typical and works out as a 1, 355 per cent interest rate. A typical credit card rate is 20 per cent and 18 per cent for a high street bank.

A leading supermarket has found that in the week before pay day, their customers buy a lot more of the value products to try and cut back on their spending.

The problem with these quick fix loans is that the people who need them most will no doubt only make their financial situation worse by taking them out. It may therefore be better for people who really need some extra cash to consider taking out another sort of loan such as personal loans.




Lenders offering short term loans have found that their business is in more demand now.

In the US, payday loans have been very popular and have been blamed for housing problems over there.

If you do need extra cash, it may be better looking into another sort of loan such as personal loans