High interest loans ''a last resort''

By MoneyhighStreet Staff. Published on November 12, 2008 This post currently has no comments.

Consumers have been urged to explore other solutions to financing debt than high interest loans and credit cards by a debt charity.

According to Credit Action, those "desperate" for cash need to understand the implications of choosing something that will be "very expensive" because of high interest.

Recent research by Abbey Credit Cards found that the disposable income available to the average consumer has fallen by 29 per cent compared to 2006 levels.

Britons now have an average of just £382.21 per month available as disposable income.

Francis Walker, spokesperson for Credit Action, said: "People have got to understand that it is very expensive and if they are doing it they must only do it as a one off and not let it roll over.

"If you start rolling over things that''s when the real problems happen and I think with the payday loans the APR is over 3000 per cent and things like that."