When taking out a payday loan it is every important to understand what you are entering into and your repayment terms. Now we dont want to put you off payday loans but this next story will hopefully open your eyes and make you aware of the risks of payday loans. We will also help you to don’t fall into a trap and have listed the best and most respectable loan companies on this page.
In austerity Britain, one industry is thriving – the controversial payday loans business
The trade in short-term lending has increased by four times this year, while more and more borrowers are struggling to pay back their loans.
The charity Citizens Advice recently revealed they have seen a tenfold increase in clients looking for help with payday loan debt. Thankfully, new legislation means the Financial Conduct Authority, which begins operating next year, will have powers to set a cap on the astronomical interest rates being charged.
But now some customers are still subjected to rates of more than 4,000 per cent APR. Cash-strapped Brits are also being targeted by devious loan companies with offers of easy cash for Christmas.
The industry is even targeting borrowers with a special app for handheld devices. It tempts punters with offers of “Instant cash” at the touch of a button.
Today we reveal the massive debt that can quickly mount up after borrowing relatively small sums.
Here, two borrowers talk about their horrendous experiences after getting into payday loan debt, and we tell how some loan firms can quickly turn nasty if payments are missed. We asked the respective companies for a response but did not receive one and therefore, anonymized the report. We also provide you with a list of the most respectable loan companies, with good and cheap offers, that will not trick you.
Customer service assistant Luke M. was just 18 when he took out his first payday loan.
He says: “It was in 2008 and I was already £2,000 in debt with my bank.”
“Incredibly, company PE wired me £150 like it was free money. Initially I borrowed it so I could pay my car insurance and still afford to buy Christmas presents for my loved ones. I was working in a bowling alley and struggling to make ends meet. The following month I couldn’t afford to pay back the outstanding balance, so I just cleared the interest. It rolled over every month and by June 2009 I was borrowing from several other lenders to pay the interest. I took out a loan with QQ to pay off the original loan. I then took another payday loan to pay off QQ, and so it went on and on.”
Travel Manager Casey W., who lives with his parents in South London, was 22 when she took out her first payday loan.
She says: “I took out loans with 20 payday companies.”
“My original loan went up to £10,000 with interest and default charges. Before I knew it, I was up to my eyeballs in debt. Despite my age and naivety, the lenders showed no compassion. I desperately tried to arrange a repayment plan based on my earnings so I could pay back an affordable amount each month. But whatever I suggested they demanded double. At my wits’ end, I had no choice but to pawn my belongings. My parents wondered why I was always ‘losing’ my phone and why I’d suddenly lost interest with my designer shoes and computer. The truth was I’d sold everything apart from the clothes on my back but I didn’t want them to know. By early 2010, things had turned really ugly. I was borrowing from PE, QQ, W., CG, MB, SD and MQ, to name a few. Every day I’d receive dozens of threatening emails, phone calls and texts. I could no longer hide the truth from my parents as the lenders started calling the house phone ten times a day, asking for me.”
Take a safe payday loan – use our list to find the best
To avoid the mistakes described above, we provide you with a list containing the most respectable and reliable loan companies that will take your needs serious. You can filter the list to find the cheapest payday loan and still be sure to place your loan with a reputable company. We know how important it is to have a trustworthy and fair partner when applying for a payday loan. Our financials are a private matter and too important, to not use a decent company that will offer you a reasonable loan.