Counselling: huge rise in payday loan borrowers

Desperate payday loan borrowers seek debt advice.

10:12 19 July 2013

Scores of individuals who have acquired payday loans are now seeking debt advice from Step Change.

 

From January to July the charity has received more than 30,000 calls from people desperate to know how they can possibly cope with their short-term loans, which is costing them an amount and has become a burgeoning problem.

 

Step Change reportedly finds it quite alarming that the number of people with five or more payday loans is steadily growing.

 

Payday loans were perhaps originally conceived with good intention – to fulfil the need of individuals to have emergency funds immediately. The popularity of payday loans rests on its hassle-free approval and also because of its short payment period. However, transactions are perhaps completed so fast that the borrower may not have time to compute the rates and understand the real consequence in the event they miss out on the payment.

 

The following are some tips to ponder over in case you have desperately run out of options and are left with a loan to save the day:

 

Read and understand the conditions very carefully so you are confident that you are doing this with your eyes wide open.

 

Do not sign up with the first lending company that catches your eyes. Call several lenders and compare their offers and decide what offer will work for you.

 

Never, if you can help it, take on another loan just to pay for the current one. This is could lead you down the route to financial disaster. If you can hardly pay for one loan, how can you deal with another?

 

Remember that a loan should be an option for say emergencies, at best acquired one time and never be made as a way of life.