The National Debtline – who provide free and independent debt advice – claim that the UK could be working their way to a payday loans crisis. The helpline has revealed that over the last six months they’ve received calls from 9,500 payday loans customers who are struggling to pay off their debt. The calls are a 116 per cent increase on the same time last year.
The idea of a payday loan is that you receive a small cash boost – typically between 100 and 300 – to help you out before you receive your income from work at the end of a month. As such, repayment of the short-term loan is required between 7 and 45 days of completing your transaction.
Applying for a payday loan is a simple and stress-free process that can be completed in less than a minute with payment usually received in less than 24 hours with some lenders even able to pay within an hour of an application. What makes a payday loan so appealing is that you are not always required (lender dependant) to have a good credit history and an application will merely require you to provide some everyday information along with your employment status.
The amount of cash that you will be eligible for is usually dependant on your income in order to reassure the payday lender that you will be able to payback your claim within the specified time frame.
However, these types of situations should not arise when dealing with responsible lenders because of the rigorous credit checks that take place. These snapshots will provide lenders with the relevant information needed to make a decision on whether an individual would be able to sufficiently pay back their debt.
While the National Debt line is predicting that the country is heading towards a payday loans crisis, the only away to avoid such a scenario is for individuals to be completely in control of their financial prospects and be certain that a short term loan is beneficial. The increased transparency of responsible lenders – such as Ferratum – will only go towards helping consumers make their decisions.
Matthew Wood is a freelance writer and online marketer. Matthew writes for many online publications, as well as developing content and articles for a variety of well-established websites. His latest project is writing informative articles on the subject of payday loans for the reputable online agency Ferratum
