Figures show that the average interest on a payday loan is 2000% comparable with up to 800,000% on an unauthorised overdraft charge from some UK banks.
There have been calls for a cap on bank charges, the previous Labour government had a chance to vote against them in 2007, however no action was taken and it seems the present government are following suit. Until these charges are capped, payday loans may be the only option for those struggling with their finances.
Like all consumer credit companies, Payday loan companies are regulated by the Office of Fair Trading, however many of these payday loan companies do not run in depth credit checks on application, meaning that a borrower could borrow from multiple payday loan companies at any one time and fall further into debt, unable to pay back the payday loan companies and running the risk of County Court Judgments and a bad credit report.
A Debt Advisor at http://www.dfh.co.uk said; “Those seeking finance from a payday loan company more than five times in a year are likely to be in financial crisis therefore would benefit from talking to an independent advice organisation to find a long term debt solution before their financial situation worsens”.
“We help thousands of people in the UK regain control of their finances. Our company practise is to ensure that every person receives the highest level of service and the most appropriate and suitable debt advice”.