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More people in debt are paying off payday loans among their other unsecured debts, according to our research.
The number of people we’ve started helping with payday loans has more than doubled in two years*.
If you have found yourself in this situation, what can you do about it?
When you have bills to pay and payday still seems a long way off, a payday loan can seem like an ideal solution.
However, interest charges can mean you pay back a lot more than you borrowed, and failure to do so on time may result in your lenders charging you more than you expected. So, in the long run, taking out a payday loan may increase your money worries, rather than ease them.
You’re not alone. One in three of Debt Advisory Centre’s (DAC) new clients this year has owed money to payday lenders. This is a 106% increase since 2011, and shows just how popular these loans have become. While two years ago, 18% of DAC’s new clients owed money to payday lenders, in 2013 this has risen to 37%.
Interestingly, the number of payday loans held by each new client has changed very little since 2011. In two years, it’s grown from 2.7 to 2.9 loans on average. However, they do make up a larger chunk of the average client’s overall debt … going from 7% in 2011 to 15% in 2013.
How do I tackle my money worries?
Payday loans are just one type of unsecured credit that can leave you worrying about debt. Other types include credit cards, store cards and overdrafts … and if you have one or more of each, it may feel like paying your lenders each month is an impossible balancing act.
What started as a loan to tide you over for a few weeks has now increased with interest, and paying it off alongside your other debts … without using the money you need for your essential living costs … could easily be causing you sleepless nights. However, there are ways to regain control of your finances.
It pays to sit down and write a detailed plan of your income and outgoings every month, including all your debt repayments. This can help you pinpoint where exactly you could save money that could go towards your debts.
But if you’re struggling right now and there’s no way you can afford all your payments, you might need to get help from a professional.
Our expert advisors are standing by to help. Fill out the callback form on this page and one of our team will get back to you, to talk you through your options and help you find the best way to get back on top of your debts and repay your lenders at a rate you can afford.
Find more information on common debt problems below:
*The data covers all Debt Advisory Centre clients who started a debt solution in the year, including Debt Relief Orders, IVAs, Debt Management Plans and Bankruptcy - and, in Scotland, Trust Deeds, Bankruptcy and the Debt Arrangement Scheme.
by Christine WalshBack to blog home