Debt Support Trust has raised concerns about the increased number of people with payday loan debt contacting the charity for support.
Statistics produced by Debt Support Trust show that on average people with payday loans rarely take out one loan. Instead, they have on average 4 different payday loans totalling £1,200.
The total amount of money borrowed, coupled with missed repayments and further charges mean a small loan can soon escalate and be very difficult to repay.
Action is Required
Debt Support Trust would like to see more being done from a political perspective where US style caps are placed on fees and payday loan rollovers. The story recently featured within the Metro’s Monday section.
Stuart Carmichael, Trustee with Debt Support Trust said to the Metro “We want greater restrictions on interest rates, the number of loans allowed and charges for late payment so debts don’t get out of control”.
In the US, each state has their own laws for fees on payday loans, for instance, the maximum fees and charges in the state of Alabama is 17.5% of the total loan amount. In Arizona it’s 15% of the total loan and it can’t be more than £500 with three rollover period.
Payday Loans at Christmas
Further research completed by Debt Support Trust found that 21% of people who contacted Debt Support Trust with payday loan debt problems intended on using payday loans to fund Christmas. The main reason for this was because they didn’t have enough money to fund the basic cost of Christmas.
Stuart Carmichael commented “Christmas is a costly time and people often struggle to afford presents and gifts. It’s important people enjoy the festive period but not at the expense of repaying their debt for the next year.”
Solutions to Payday Loan Debt
There are various solutions to payday loan debts. Depending on the country you live in you could be applicable for a debt arrangement scheme or debt management plan. Alternatively, if the payday loan problem is coupled with other debt issues then an IVA or Trust Deed may be the best option.
There is always a solution to debt. A volunteer and qualified debt advisor at Debt Support Trust will be happy to help you with your payday loan debt.