The Money Stop

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 over recent months, with the global credit crunch resulting in far tighter credit conditions that have left many would be borrowers out in the cold. This means that many have had to seek other ways of raising money, and this is reflected in figures that show an increase in the take up of payday loans.

Recently a major doorstep lender reported an increase in business since the start of this year, showing how many consumers have turned to doorstep lenders. And now figures relating to payday loan have shown that there has been a 55% increase in the take up of these loans, with some people opting for them despite their high APR levels because no credit check is carried out.

The amount that can be borrowed by way of a payday loan is restricted, with the limit usually at around £1000, although the exact amount available to borrow is based on your financial and employment situation. The loan is usually made for a short period of thirty days, with the idea being that you repay the loan once you have been paid. However, in some cases you can roll the loan over for a further month as long as you pay the associated fees.

The charges on payday loans can be quite high, and if you are taking out these loans regularly then you may need to take a look at your financial situation. One industry official said: “Are you paying out more than you get in each month? If you are, then you need debt advice, to see where you can make cutbacks. You may need to negotiate smaller payments with your creditors…or your mortgage lender.”

Recent additions:

• 100% mortgage customers should watch out for negative equity
• Homeowners are not as well off as tenants
• Increasing number of first time buyers look to brokers for assistance
• Gazundering becoming more commonplace
• Unions angry over insurance job cuts

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