Payday lending and bad economical times

Let’s face it, the UK is in a mess. No matter what grand speeches the politicians stand up and preach, the numbers tell us the real story. The number of people working in low-paid jobs has increased and the incomes in Britain have fallen 8% since 2008. Shockingly the percentage of people working in low-paid jobs and living in poverty is higher than those who don’t work at all. All in all there are approximately 13 million people living in poverty in Britain, a country once the centre of an Empire that spanned the globe.

Tough economical times make people desperate

People are desperate. Desperate to keep their homes, pay their rent, pay taxes, put food on the table. To compound the problem getting any kind of credit from institutions like banks and building societies is impossible. People have no choice but to turn to the places where they can get cash. Payday loans.

Payday loans are quick and easy to obtain

Payday loans are meant for a certain target market and there are those people who utilize the service and make it work for them. These loans are easy and quick to procure but need to be carefully managed. As soon as you let a payday loan run away with you, you end up with a snowballing loan that is impossible to control. There are people who have up to 12 payday loans from different companies, juggling them, using one to pay off another.

Payday loans should be used for things like financing a birthday party, fixing a problem with the car, that unexpected expense that you need a little bit of help with and can pay back with your next pay check, within a month or two. What is happening is that people are forced to take out payday loans to buy food, and pay their rent. They don’t actually have much of a chance to pay the loan back timeously and as the loan rolls over month after month it becomes a huge problem.

Many people who are asked when entering into a payday loan if they understand the terms and conditions are only vaguely aware of what the loan entails. This is not surprising. In similar surveys conducted with credit card applications only a tiny percent of the applicants took the time to read the small print or investigate the terms behind the boldly advertised perks. For example, many people don’t understand what an APR is, or have little to no education about debt and how it works. They just need money to buy food, heat their houses and clothe their children. Is it the payday companies that are taking over Britain and ruining the economy, or was that economy a mess in the first place? Why is it that the British population has nowhere else to turn?

Content writing for websites by Lyn Gunell