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Using payday loans could signify a debt problem
21 May 2008
People who regularly use payday loans could be struggling with a debt problem and should seek advice, claims a debt support company.
A reliance on payday loans to pay off debts often means that a borrower is "overcommitted" and is finding it hard to cope financially, according to National Debtline, a national telephone helpline for people with debt problems.
Beccy Boden Wilks, spokesperson for National Debtline, said: "If somebody feels the need to use a payday loan on a regular basis, it's probably symptomatic of a serious underlying debt problem."
Borrowers who use the short-term loan ahead of their next pay cheque often have more debt than income and using the loan is not a solution to their overall situation.
Payday loans have higher interest rates so people should either reorganise their spending budgets or negotiate smaller payments with their creditors in order to keep better track of their finances.
Research by Moneysupermarket.com revealed that the take-up of short-term payday loans has increased by 55.4 per cent since September 2007.
