Temporary credit such as unauthorised overdrafts or short term loans have aided one out of every seven Brits pay their mortgages or the rent in 2011, according to one housing and homeless charity.
Shelter, the charity who conducted the recent research study, has issued a warning that reliance on these temporary methods of getting quick loans could result in Brits becoming homeless. Shelter said that their research could mean that nearly seven million Brits across the country could be running into problems by relying on instant cash loans, urging them to seek help immediately before sinking into debt.
Around 2 per cent of Shelter’s research survey respondents indicated using at least one instant cash loan to pay their mortgage or rent in 2011, which equated to nearly one million Brits. However, these loans are designed to be used in the short term, which makes them quite unsuited for paying housing costs due to the relatively high interest rates some of these loans carry.
Shelter’s chief executive, Campbell Robb, called the findings ‘shocking’ in regards to the desperate struggle of millions of Brits to keep their home, especially when turning to the inherently unsustainable nature of shorter term credit such as overdrafts and short term loans. Debts can quickly snowball out of control, Mr Robb added, which could lead to repossessions, evictions, and, in truly dire circumstances, homelessness.”
Payday loans, experts say, provide a valuable service for people needing a bit of an extra boost in emergency situations while they’re in between pay cheques. However, using these loans to meet housing costs could be a sign that household finances are in shambles, and experts agree with Shelter in recommending anyone needing to rely on short term loans to keep a roof over their heads should seek aid immediately.