I WAS very interested in an article I saw via Twitter earlier this week from one of our followers.
As we have been very vocal about in this column before , it's incredibly important that you have exhausted "every" single avenue first before taking out a payday loan. The loan must be for an amount of money you can pay back comfortably and ask yourself, is it absolutely necessary?
Payday loans should only be used for very small loans over very short periods of time. Increasingly, we are seeing more and more people getting in trouble with payday loan companies.
A payday loan company's typical client, according to leading consumer borrowing champion Zero-Credit, takes out six loans in 12 months. So you can see that the ease of access to cash can cause habitual, if not addictive, usage.
However, there is now the threat of an even bigger menace, with the emergence of the one-year, online, instant loan market, with online companies providing one-year loans up to 278% APR ! A £1,000 loan charged at 278% equates to a total charge of £2,028. A one-year loan of £1,000 through a mainstream bank with a fixed APR of 18.6% equates to a total of £1,104 repaid at the end of the term, leaving the client a staggering difference of £924 better off compared to the online instant loan.
Read more - http://www.thisisnottingham.co.uk/Money-matters/story-16624949-detail/story.html
