Payday Loans Used by Over Million People to Cover Bills
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UK people are in harsh financial situation and more than a million people are moving towards short term lending opportunities to meet necessary expenses such as energy, water, council tax bills etc. Reports say that three in ten Brits are currently using overdrafts, credit cards, logbook loans and lots of other sources to manage cash in order to meet end expenses cost. According to Santander research total borrowings have gone over £3.6 billion or £259 per person.
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Figures revealed that more than a million people about 2 percent of total population are turning towards payday loans. People have borrowed £2 billion in a year for necessary expenses which is equivalent to £1836 each. A spokesman from a leading financial firm has said that such financial practices are really worrying. Payday loans are very expensive and if person start using the amount borrowed through these cash option for day to day expenses then they may face worse financial situation. Pay day loans are very expensive so it is better to seek cheap financial options to manage such expenses. Credit unions, short term lending from bank or logbook loans are much cheaper option than payday loans.
People who are at lower end of social economic spectrum are struggling badly to manage their expenses. So many people are struggling at this moment for financial stability. All these things are showing the widen area of market. Men are more likely to borrow cash than women. Young UK individuals also use borrowed amount to pay off their bills. 38 percent of young people aged 18 to 34 are using loans as compared to 17 percent of over 55s and 30 percent of 35 to 54 years.
Office of fair trading (OFT) has investigated the payday loan industry. Payday lender target unsuitable group and also charge very high rates. Code of practice has been beefed by the industry for better consumer protection.
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