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 and consumers can often find cheaper borrowing options.

Ms Boden Wilks warned that people using payday loans on a regular basis may have a more serious underlying debt problem and advised them to have a close look at their budgets as well as to possibly seek advice on how to deal with their debts.

“If you’ve run out of money [ahead of your next paycheque], so you feel that you need to use these sorts of services, then there’s obviously a problem,” she commented.

Ms Boden Wilks added that people using these services should review their spending and budgets.

The take-up of short-term payday loans has risen by 55.4 per cent since last September, according to Moneysupermarket.com.

Tags: problem, Business Finance, debt, spending, national debtline, finance, Financial services, Boden Wilks