The Money Stop

British consumers are increasingly turning to “payday loan” providers, which offer loans at annual percentage rates (APRs) of up to 1,355.

The loans, which are popular in the US, pay customers up to £750 into their bank account with an agreement to repay the loan at the end of the month when their paycheque arrives, according to a financial expert at fool.co.uk.

However, they typically charge £25 for every £100 borrowed, rising to £31.25 if the customer fails to pay it back on payday and can reach £1,400 if a borrower does not make any payments for a year, claims the website.

“These truly ugly loans are overpriced, overused and over here. Brits are falling victim to this form of borrowing when they should be fleeing from it,” Laura Starkey, a financial expert at price comparison site fool.co.uk, told the Independent.

To survive the credit crunch icWales.co.uk advises people to cut down on car journeys to save petrol, switch their utilities supplier and change credit cards to get the most competitive rates.

Related Posts

Debt cycle ‘carries on’ with payday loans

Regularly using payday loans to get through until the next paycheque can lead people into a spiral of debt, National Debtline has warned.Spokesperson Beccy Boden Wilks said that payday loans can have high interest rates

Payday loans becoming more popular what hard up borrowers

In the past many people that were hard up and needed to raise some extra cash opted for a credit card or a loan. However, for many consumers these lines have credit have dried up

What the experts think of falling house prices

It has now become pretty clear to most industry professionals and consumers that house prices in the UK have already dropped significantly compared to last year, and are set to keep falling over the course

Banks’ January sales scam

Consumers are being warned that banks are trying to fool them with so-called new year sales, says an industry expert.A number of high street banks have launched special deals this week, claiming to offer consumers

Many people permanently in the red with overdrafts

A recent report has highlighted that by the 20th of each month many Brits find themselves running out of cash and having to rely on their overdrafts to see them through the rest of the

Improve your credit rating, advises expert

People who do not have a very good credit rating should make an effort to improve it, an expert has advised.Richard Brown, the chief executive of Moneynet.co.uk, has said that lenders will not want to

Debt becomes ‘norm’ for Brits

Getting into debt is now accepted as normal and in many cases necessary, an industry expert has said.Alastair Mathews, director of policy educational charity pfeg, explained that if people wish to go to university or

New car loans figures from Halifax

New research from Halifax has shown that January and August are the most popular months for applying for a car loan.According to Halifax Unsecured Personal Loans, the most popular age group for taking out such