People Turning To PayDay Loans To Pay Their Rent Or Mortgage

Many people are struggling with their finances and relying on credit to pay their housing costs with almost one million people resorting to payday loans.

According to a survey by Shelter, nearly one million people have taken out a payday loan to help pay their rent or mortgage in the last 12 months. Others are using other forms of credit, including unauthorised overdrafts, other short term loans and credit cards.

The worry is the resulting spiral of debt that people are falling into just to keep a roof over their head.

The charity warns that the New Year could bring with it a risk of homelessness, for those who are struggling with their housing costs and is urging anyone worried about their debts to make seeking early debt advice their New Year’s resolution.

Martin Lewis of MoneySavingExpert.com, said: “It’s incredibly worrying there’s now evidence of people using payday loans to meet housing costs. Many struggling with core rent or mortgage commitments will struggle to repay payday loans on time too.

“While it’s an obvious temptation to grasp these loans as a lifeline, in the long run it may hurt more than help.”

And as Campbell Robb, Chief Executive of Shelter, comments: “Turning to short-term payday loans to help pay for the cost of housing is totally unsustainable. It can quickly lead to debts snowballing out of control and can lead to eviction or repossession and ultimately homelessness.

“Every two minutes someone in Britain faces the nightmare of losing their home. We urge every single one of these people now relying on credit to help pay their rent or mortgage to urgently seek advice.”

MoneyHighStreet.com comments: ” We absolutely agree with Campbell that those regularly relying on credit to help with rent or mortgage payments should urgently seek advice.

Equally if you feel your personal finance is getting out of control, that you cannot manage your debts as your outgoings exceed your income, the sooner you seek help or advice the better. Debt problems are unlikely to resolve themselves without some proactive action from you.

“If you are struggling, try making a budget so that you can see what money you have coming in each month, what ‘must have’ payments you have each month, such as heating bills, food bills etc and then assess the ‘nice to have’ to prioritise which ones can stay and which, if any, may have to go.

“Whilst having a budget may seem difficult, it really isn’t. There’s lots of help available, for example on the Government moneymadeclear website and here on MoneyHighStreet, as well as money management software to use to record your financial transactions.

“Shelter too has a network of specialist advice services around the country, a free telephone helpline and online advice available at shelter.org.uk/debt, including a new budget calculator.”