There was a new report published at the beginning of December with regard to payday loansand the effect they are having on our society. The facts that are revealed are absolutely staggering, research carried out by R3 who are an insolvency trade organisation, shows that as many as 45% 0f us are finding it difficult to make ends meet on a monthly basis and find it impossible to get through to payday without some sort of loan. In the survey it was also revealed that 3.5 million will consider taking a payday loan to cover their overspend.
Payday Loans Survey
Interestingly when surveyed it showed that remorse was high, in fact out of all who took the payday loan around 60% regretted taking the loan and 48% admitted that in their opinion the loan worsened their finances, only a modest 13% thought the loan was helpful to their situation. This research highlights the problems that are deeply affecting the lower paid and unemployed, however it also affects workers who have a reasonable salary but have overspent and continue live beyond their means. Increased mortgage rates, inflation and job insecurity are having a devastating effect on society and will continue to do so until growth returns and the banks release their grip on borrowing . Care should be taken when entering the world of payday loans, and it should noted they should only be used as a last resort, however when borrowing becomes a regular occurrence and you are struggling to reach your payday all the signs are pointing towards a financial disaster. If you are still spending beyond your means and it is possible to reduce your outgoings, then you are going to have reevaluate the way you live. If you can manage to cut back and save just a small amount every month it will create a buffer which will be there for any financial emergencies. If however, you are in severe financial difficulty and have trimmed all the fat from your monthly outgoings yet still find you need a payday loan you should consider taking advice. If you are young and are just starting out, then maybe the best people to ask for help are your parents, they possibly won’t be able to pay off your debts but are more than likely able to give good advice.
Payday Loans Alternatives
High street Banks and credit unions are now starting to wake up to the need for very short term loans, the banks see this as another form of revenue and the credit unions see it as a way to help members. With far lower interest rates than with a payday loan it could help boost profits and also help the borrower.
Credit unions
There are other ways to get your money to stretch to the end of the month. In a lot of cities there are credit unions who serve the community, some of the credit unions will actually advance up to £500 (depending on your salary) to be paid back out of your next pay check
Small bank Loans
I realise that this is not pertinent to everyone as there is usually a need for collateral, however there are banks who are still lending if you fit the the profile which will be based on your credit score.
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One organisation I hold in high regard is the Citizens Advice Bureau, they have helped countless people by listening and then pointing the in the right direction for help. If you are concerned about having to use payday loans and are searching for an alternative way to make your salary stretch until the end of the month or any other debt issues they can point you in the right direction.
About Den NicholsonDen Nicholson is the senior editor here at Beating Bankruptcy, Since Den Retired from his UK business in the UK he has been blogging about ways of beating debt and in the most extreme cases beating bankruptcy. As well as detailed articles you can catch all the latest news from the UK with a focus on debt issues.
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