Pay-day loans over Christmas could see many fall into debt
Pay-day loans over Christmas could see many fall into debt
Wednesday 10th December 2008
Although savings, overdrafts and credit cards are options for some people, others either don't have or have already exhausted those options.
One of the only other alternatives is to take out a pay-day loan - a choice that uSwitch.com warns could end up being very costly indeed.
According to research from the price comparison site, some pay-day loans carry an interest rate of almost 10,000 per cent APR and deferring payment on a loan of just £750 for only five months could lead to debt of £1687.50.
uSwitch personal finance manager Louise Bond explained that while some may delight in having the cash to pay for Christmas presents, others may be unable to repay the money and end up in even more trouble.
"These loans really are quick-fix solutions which only work for some people - for others they act as a fast track to a tangled web of debt," she said.
"The current economic climate is perfect for these organisations to lure in unsuspecting cash-strapped consumers that are often so desperate, they really don't care how much interest they have to pay."
While a good source of quick and easy cash, it is easy to see how pay-day loans could turn a Christmas dream into a financial nightmare - meaning the services of a debt management company may become necessary.
News article brought to you by Debt1 – UK debt management specialists.
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