Consumers urged to avoid festive payday loans

Cash-strapped consumers should resist the temptation of borrowing money through a payday loan over the coming weeks, a financial expert has said.

With the effects of the recession still in full swing, many people could be finding it tough to make ends meet in the run up to the festive season and are therefore being forced to consider the possibility of lending some cash in the short term.

However, a spokeswoman for the Money Advice Service has issued a warning to anyone thinking about taking out a payday loan as, despite the fact they are convenient, such deals often prove massively expensive.

"Rates higher than 1,000 per cent APR are not uncommon, so if you are late paying, the cost of borrowing even a small amount can become very high, very quickly," she noted.

This comes after a report published by R3 yesterday (December 7th) revealed that some 45 per cent of Britons struggle to make their wages last until payday. ADNFCR-2353-ID-801233901-ADNFCR

08/12/2011 16:02

News category: Consumer

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