Payday loan use quadruples over past four years

Payday loan use has quadrupled over the past four years, experts say, with the trend continuing to grow in the future.

The economic impact of the credit crunch and worldwide recession that occurred some five years ago has led to many changes in the provision of cash loans to borrowers.    With jobs losses, wage cuts, and the cost of living going up, many households in the UK have had to make hard decisions when it comes to treading water – and many of these decisions have seen Brits racking up debt from credit cards or payday advance lenders because high street banks have tightened credit restrictions.

The number of home repossessions has been up lately, what with the rising costs associated with car insurance, electricity, gas, and petrol and redundancies in the jobs market leading to many seeking help from crushing debt in some way or another.  Banks are not an option for those suffering under the yoke of debt, as the High Street has made credit for those with poor credit histories all but inaccessible, but yet the need for finance still exists for many – leading to Brits turning to payday lenders in droves due to relaxed or nonexistent credit history requirements.

Now, traditional lenders such as banks and building societies are seeing their customer bases eroding as more and more Brits seek out a payday lender for emergency credit in tight situations.  This has resulted in ire from the traditional lending community, as campaign groups suddenly find themselves allied with Barclays and Lloyds in calling for high interest rate payday lending to be limited by government regulation.

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