>

Say No Way To The Payday Loan

December 8, 2015

finance

Payday Loans

Image by: rinkjustice

The majority of us will at some point have come up short money wise at least once in our life. It may have been an unexpected bill or expense that put you off your budget but how did you handle it? There appears to be a worrying growth in the number of businesses offering payday loans.

Payday loans are loans meant for the short term, you can usually borrow a couple of thousand with a lower number of checks and have the money in your account within fifteen minutes. Now this all sounds too good to be true. That is because it is. There is a real worry that people are turning to these payday loans as a viable way of sorting out there financial problems. With some organisations charging interest as high as 4,000% it surely must be seen that these organisations are preying on people who need help.

Have a look at this video which looks at the standards and regulation of the payday loans.

There is a real risk of people falling into a rolling debt. They may borrow a small amount of money for an emergency and find them selves paying more in interest and unable to pay back the amount, this is when the trouble begins, the amount of interest will continue to put the individual in a very tight position. Perhaps leading to the individual taking out another payday loan and digging themselves deeper into a financial hole.

So what are the alternatives?

  • Put the emergency amount on a credit card – much lower interest.
  • Create an overdraft or increase the level of your overdraft – depends if the bank will allow you to do this.
  • Borrow from friends or family – again depends on the amount and how kind they are feeling.

We at the Money Lion believe that there needs to be regulation placed on these companies and help offered to those unfortunate people who have fallen into this financial trap. There are people who have taken out payday loans and have repaid them quickly and have had no problems but there must be something put in place to stop people from finding themselves stuck at the bottom of a financial mountain due to the huge amounts of interest put on an emergency loan.

Have you ever taken a payday loan? Did you have any problems paying them back? What do you think would be a better alternative? Any thoughts and comments please leave them in the section below.

Share

Related posts:

  1. How to play the loan market
  2. Office of Fair Trading warn against using loan sharks this Christmas
  3. English students face money worries.
, , , , , ,