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07/12/2011
Payday Loans Make Situation Worse, Says Report
Half of those taking high interest, short-term payday loans have reported it made their situation worse, according to a study published on Wednesday.
The research from insolvency trade body R3 found that of those who had taken out a payday loan, 60% regret the decision and 48% believe the loan has made their financial situation worse.
Only 13% believed their payday loan had a positive impact on their finances.
The report said some 3.5 million adults were considering taking out a payday loan over the next six months, which are usually offered at crippling levels of interest if not paid back immediately.
Frances Coulson, R3 President 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."
The R3 'Personal Debt Snapshot' recorded the highest-ever "levels of concern" over debt, with nearly two thirds of individuals worried about their debt levels.
The level of concern is a 13% rise on July’s figure and up 21% on this time last year.
In London the figure rises to 67%, but peaks at 70% in the North East where concern is at its highest.
R3’s research also reveals that saving is at a new low. The number of individuals with no savings at all has risen sharply from 19% last quarter to 27% this quarter. Overall, 40% of the population is saving less at the moment than usual.
Meanwhile, a new group of ‘zombie’ debtors - who currently pay only the interest charges on their debt and not the debt itself - has also been identified by R3’s research. Around one in six individuals are only able to pay the interest on their debt rather than paying off the debt itself, with 11% or respondents only servicing debt on their credit cards and 9% only paying the interest charges on their overdraft.
“Having a financial buffer is crucial to weathering periods of difficulty. If struggling to payday becomes a regular occurrence, seeking financial advice should be a priority over short term high interest credit. ” added Frances Coulson.
(DW)
The research from insolvency trade body R3 found that of those who had taken out a payday loan, 60% regret the decision and 48% believe the loan has made their financial situation worse.
Only 13% believed their payday loan had a positive impact on their finances.
The report said some 3.5 million adults were considering taking out a payday loan over the next six months, which are usually offered at crippling levels of interest if not paid back immediately.
Frances Coulson, R3 President 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."
The R3 'Personal Debt Snapshot' recorded the highest-ever "levels of concern" over debt, with nearly two thirds of individuals worried about their debt levels.
The level of concern is a 13% rise on July’s figure and up 21% on this time last year.
In London the figure rises to 67%, but peaks at 70% in the North East where concern is at its highest.
R3’s research also reveals that saving is at a new low. The number of individuals with no savings at all has risen sharply from 19% last quarter to 27% this quarter. Overall, 40% of the population is saving less at the moment than usual.
Meanwhile, a new group of ‘zombie’ debtors - who currently pay only the interest charges on their debt and not the debt itself - has also been identified by R3’s research. Around one in six individuals are only able to pay the interest on their debt rather than paying off the debt itself, with 11% or respondents only servicing debt on their credit cards and 9% only paying the interest charges on their overdraft.
“Having a financial buffer is crucial to weathering periods of difficulty. If struggling to payday becomes a regular occurrence, seeking financial advice should be a priority over short term high interest credit. ” added Frances Coulson.
(DW)
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25 October 2011
Payday Loans Fuel UK Debt Problems Says Charity
Payday loans providing people with last minute cash before their pay check arrives is fuelling consumer debt problems, according to research by a debt charity. The survey by the Debt Advice Foundation (DAF) found 41% of those struggling with debt are saying their financial problems are the result of high-interest ‘payday’ lending schemes.
Payday Loans Fuel UK Debt Problems Says Charity
Payday loans providing people with last minute cash before their pay check arrives is fuelling consumer debt problems, according to research by a debt charity. The survey by the Debt Advice Foundation (DAF) found 41% of those struggling with debt are saying their financial problems are the result of high-interest ‘payday’ lending schemes.
07 March 2012
Report Calls For Tighter Controls On Payday Loans
A report has recommended that lenders of payday loans should be forced to limit loans being ‘rolled-over’, stop letting customers switch lenders and to share customer information with other lenders.
Report Calls For Tighter Controls On Payday Loans
A report has recommended that lenders of payday loans should be forced to limit loans being ‘rolled-over’, stop letting customers switch lenders and to share customer information with other lenders.
04 February 2010
Interest Rates And 'Easing' Held
The Bank of England today held interest rates at 0.5%, with so-called 'quantitative easing' being mainted at £200 billion. The UK officially climbed out of recession last month, following a 0.1% growth in output. "After a substantial fall in output, the UK economy recorded sluggish growth in the final quarter of 2009," the bank said this morning.
Interest Rates And 'Easing' Held
The Bank of England today held interest rates at 0.5%, with so-called 'quantitative easing' being mainted at £200 billion. The UK officially climbed out of recession last month, following a 0.1% growth in output. "After a substantial fall in output, the UK economy recorded sluggish growth in the final quarter of 2009," the bank said this morning.
02 September 2014
Increase In People Struggling With Payday Loans
The number of people struggling with payday loans is increasing, according to debt charity StepChange. In the first six months of 2014 the charity helped almost 13,000 more people with payday loan debts than in the same period last year.
Increase In People Struggling With Payday Loans
The number of people struggling with payday loans is increasing, according to debt charity StepChange. In the first six months of 2014 the charity helped almost 13,000 more people with payday loan debts than in the same period last year.
06 March 2013
Payday Lenders Risk Losing Licenses
The OFT is giving the leading 50 payday lenders, accounting for 90 per cent of the payday market, 12 weeks to change their business practices or risk losing their licences. They uncovered evidence of widespread irresponsible lending and failure to comply with the standards required of them.
Payday Lenders Risk Losing Licenses
The OFT is giving the leading 50 payday lenders, accounting for 90 per cent of the payday market, 12 weeks to change their business practices or risk losing their licences. They uncovered evidence of widespread irresponsible lending and failure to comply with the standards required of them.
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