Payday loans - Be careful!
04 January 2012
What is a Payday loan?
Payday loans are becoming increasingly popular as can be evidenced by the growing amount of television adverts by companies advertising this form of lending. The fact is, if they were not making a huge amount of money from this they would not be advertising on the television.
It is true that for many this type of loan can be a real lifeline and can therefore be the only form of finance available. However, as I keep telling people, you have to be really careful when taking out a payday loan.
My main concerns over Payday loans are:
1. The interest rates are huge, meaning that payday loans are really expensive forms of lending; and
2. The repayment terms are generally very strict with the loan repayment period being very short.
I have heard so many horror stories about payday loans where people have only made their problems far worst by taking out these loans. Another key point to make is that payday loans are totally unregulated and we all know from experience that unregulated lending is a recipe for disaster! As such I strongly believe that regulations need to be put in place and FAST.
Thankfully MP Stella Creasy agrees with me and she has launched an e-petition on the matter which I am supporting and encouraging others to sign up to.