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Its time for action on payday loans

Payday loans. Don't use them to deal with debt.

If you’re struggling with debt problems, payday loans aren’t the answer. They’re a short term type of loan and will usually have a significant amount of interest.

It’s important to know that payday loans are not a debt solution and can make your financial situation worse. Our free guide to payday loans will take you through all the ins and outs you need to consider with a payday loan. You can also watch our video to find out more on what questions to ask yourself before taking out one of these high-interest loans.
 

Is a payday loan right for me?

It depends on your situation, but there’s a likelihood that a payday loan isn’t a good idea. It’s important to make sure you think things through before taking one out. You should consider:

  • Why do I need a payday loan?
  • Are there other sources of finance available with lower interest rates?
  • Can I afford to repay the debt on time?

Watch our payday loans video to help you find your answers to these questions:

Need help with payday loans?

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Alternatives to payday loans

There are several alternatives to consider before taking out a payday loan...

  • Your local credit union: they provide straightforward and affordable financial products. Credit unions are likely to be far cheaper than payday loans. 
  • Sell your unwanted items: have a clear out and turn these into cash
  • Cut back: reducing your spending might be enough to avoid the payday loan trap
  • Ask friends and family for help: it might mean swallowing your pride but could save a lot of worry in trying to repay a payday loan
  • Get debt advice: if you're considering a payday loan to deal with an existing problem then you'd be much better getting some free and impartial debt advice from us

Payday loan statistics

We've seen a huge increase in the number of people approaching us for help with payday loans:

  • From 2011 to 2012 we saw a 109% increase in the number of our clients with payday loans
  • In the same period the average amount owed increased by £390
  • In 2012, we helped 36,413 people with payday loan debts, almost 20,000 more than in 2011
  • The average monthly income of a client with payday loans is £1,320 per month, but the average payday loan debt is £1,657
  • In 2012, 74% of those people seeking help with payday loans had a net annual income of less than £20,000
  • 42% of clients aged under 25 had payday loan debts in 2012, up from 25% in 2011
  • Payday lenders are the biggest source of complaints made to us, despite the fact that only 19% of clients have payday loans

Have you got any payday loan stories?

If you’ve taken out payday loans in the past what attracted you to them? Why did you take one out, and did you find all of the loan's details on the lender’s website sufficient to make a considered opinion?

Or, have you receive cold calls or spam texts from lenders? What do you think about these loans being advertised on TV and radio?

Please add your comment to the box below. All comments are welcome, and may be published.

Payday loan calculator

Use the sliders to enter the loan details. We’ll show you an example of how the amount you pay back can soon spiral if you can’t repay it in full when it’s due.

Loan amount: £100
 
Loan period: 1 day
 

Calculate

 

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