How to avoid the payday loan trap.
At Payplan we are seeing more people who have multiple payday loans calling us as they find themselves in the payday loan trap. People are finding it difficult to manage their finances and find themselves using a short term loans. However, some people are then getting trapped in the cycle by using one to pay off the other.
Research conducted by Shelter revealed that more people are turning to payday loans in order to pay for their rent or mortgage payments. In 2012 we revealed similar statistics; with many of our client using payday loans to not only pay for rent or mortgage costs but to pay for general day-to-day living costs such as food, fuel and childcare. The economy is not looking any better and families will continue to struggle in 2013.
We have put together a brief guide on how you can avoid the payday loan trap:
- Work out all of your incomings and outgoings. Identify any areas in your budget where you can cut back – whether that is cancelling gym memberships, switching supermarkets or changing insurances to a cheaper deal.
- If you are struggling to make this month’s mortgage payment then contact your mortgage lender to see if it would be possible for you to have a mortgage break. If you are living in rented accommodation, then you could still speak to your landlord to see if you can come to an arrangement.
- If you have outstanding debts that are becoming difficult to manage then you can contact Payplan or visit your local Citizens Advice Bureau to get assistance with re-paying these debts at a rate that is affordable to you.
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