UK's debts increasing because of Payday loans

A recent survey by Uswitch has revealed that despite the fact that payday loans in UK serves as a quick cash provider, they are amongst the most expensive forms of loans. For eg. If a borrower borrows an amount of £750 applying for payday loans, and postpones his repayments for 5 months, his dues becomes £1,687.50 that means some APRs could be as high as 9889.3%

In such a credit crunch, payday loans are attracting more young people who cannot afford to find a suitable type of loan for themselves in a short period of time. An official at CCCS announced.

He further stated that what lenders usually need for approving a loan are valid ID proof, a regular source of income, and a post-dated cheque.

According to the reports, the total personal debt amounted to £1.456 billion in UK at the end of Nov'08.

Therefore it is worth noting that payday loans must be considered as a solution to last resort because of their high interest rates.

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