Say what you like about payday loans, but there is a real reason that they have become so popular and that the demand for them by UK consumers continues to grow.? This reason is completely isolated from payday loans companies and is completely linked to the economic crisis and the lack of services which the banks currently supply.? A survey for the union Unite has identified that one in eight people are unable to make their wages last for a whole month and that most workers run out of money in the third week of the month.? Therefore they have no choice but to seek out alternative sources of income.
Cash till payday loans attract a lot on negative publicity due to their high rate of APR which can be anything between 1737% and 5000%.? The amount of loan that can be accessed can vary between ?50 and ?1000, so of course if you couple this with these rates of APR, it does have worrying implications.? However the economic situation as it is does nothing to discourage customers from turning to payday loans.
Ever since 2007 when the Lehman Brothers collapsed, sparking the beginning of the economic recession, the UK has been plagued by bad news.? The government has announced and indeed put into practise its austerity measures, there have been millions of job cuts, wages have been frozen, hours have been cut and inflation continues to rise.? Recently, senior figureheads of the Bank of England and government MPs have all gone public with their fears that these conditions are here to stay for at least another five years, if not longer.
All of these conditions impact on every single household in the UK.? One in ten workers are unable to make their wages last for an entire month and 12% of these workers turn to payday loans for financial assistance.? According to research up until April 2012, employees were approximately ?150 worse off which meant that they were unable to meet their housing, utility and food bills.? People under the age of 25 are most affected.
Whilst payday loans might not be the perfect solution for households who cannot meet their outgoings, it is very difficult to signpost them to another alternative financial solution as banks are simply unwilling to lend in the wake of the banking crisis.? Until the economy stabilises or the financial institutions offer an improved lending service, there will continue to be a demand for payday loans from UK households.
About The Author: Laura Susstance is a content writer from the UK, when not writing on a freelance basis or writing guest blog posts, she regularly writes on her own blog: http://www.fastpaydayloansreview.com
Source: http://www.frugalfinance.co.uk/no-wonder-people-are-turning-to-payday-loans/
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