Prices rises force people to turn to payday loans
Published On 16 May 2008
As prices in the UK continue to rise, more and more consumers are opting for short-term loans to cover their living expenses, a new report has claimed.Website moneysupermarket.com reported that the take-up of short-term payday loans has increased by 55 per cent since the beginning of the year.
Tim Moss, head of loans at moneysupermarket.com, explained that the increase indicated the difficulties that consumers were having managing their finances during the economic slowdown.
"As disposable income is being squeezed through increases in the cost of food, fuel, utilities and general living necessities, these loans are increasingly used to help those on a tight budget," he added.
"Payday loans can be useful as a short-term credit vehicle. They are a bit like taxis -convenient for short journeys, but if you are going a long way, there are much cheaper ways to travel."
Mr Moss said that that people thinking about borrowing for the long-term or those who know they will not be able to pay back the money immediately should "steer clear of them".
"It would be wiser to borrow the cash from family or friends or arrange an authorised overdraft with your bank," he concluded.
