New figures were released this week from StepChange showing the number of people who approached the charity had almost doubled since 2012. The number of individuals seeking help or advice regarding payday loans rose from 36,400 in 2012 to 66,500 in 2013.
The rise which was over 80%, was not even the most shocking aspect of the report. After surveying those that had contacted the charity, on average they held three of the short-term high-interest loans. Almost 15,000 of those they had helped had five or more and the average owed totalled £1,647, £300 more than the average income.
Concerning the report the charity were quick to point out that the biggest problem with the loans are that the debts are inflated through interest and charges applied if payments are not made. They are calling for real-time credit checks and a limit on rollovers, something we agree needs to happen. In one case an applicant’s debt grew to £1,851 in three months, he originally owed just £200.
Payday loans are a key indicator that you require financial advice, especially if you are using them to pay interest on other areas. There are a range of options available to anyone suffering with debts, not just bankruptcy. As licensed practitioners we have access to the whole range of solutions available to individuals suffering from financial difficulties. If you need help, contact us.