Don’t believe the hype when instant cash loan companies open their mouths about how their loans are only used occasionally by their customers: new research revealed that the majority of Brits who take out short term loans from payday lenders need to do so to pay household bills or essential items such as petrol and food.
The cat is pretty much out of the bag at this point. Even though lenders will advertise their services in such a way that it makes it look like you can simply take out the cash to do fun activities such as paying for cooking classes and the like, 60 per cent of those who do take out payday lending are struggling with their day-to-day expenses to the point where they feel their only way to stay afloat is to take out one of these high interest rate loans, only to struggle to repay the loan on time and risk being inundated with massive late fees and service charges.
One out of 4 of those surveyed said they had been subject to exactly these types of charges, many of which are hidden or poorly publicised by lenders. 1 out of 5 found it impossible to repay the loans by their next payday, resulting in the dreaded ‘roll-over,’ which benefits no one but the lenders, and one out of three reported their financial situation actually getting worse after taking out payday lending.
Around 45 per cent reported having to roll over their loans at least one time because they couldn’t repay it in full by the due date. Not only that, but more than half of people who take out short term loans reported being encouraged by their lenders to take out an additional loan.