News - Payday Loans Borrowers Need Extra Cash For Food, Fuel And Rent
People who use payday loans are likely to use the money for everyday essential such as food, fuel and rent or mortgage payments, says pay day loans Company PayDayAdvances.net.
A payday loan is designed to offer short-term loan to people to cover bills until pay day when the loans is due for repayment, but a recent survey by consumer advocate Which? shows that nearly four in ten borrowers use a payday loan for essentials while one in five use them to make sure the rent is covered. Which? found survey respondents claimed to use pay day loan as follows:
- 38% fuel and food
- 34% emergencies
- 32% regular bills
- 24% repay other debts
- 20% rent
- 11% holidays
The payday loans industry first emerged in the UK in 2006, although in the US it had been established for many years prior to this, however it wasn’t until the start of the recession that the industry took off and they became popular in the UK. The resulting credit crunch saw people being denied access to much needed funds as their incomes dropped and work dried up, and the pay day loans industry stepped in to fill the gap.
A spokesperson for pay day loans Company PayDayAdvances.net said: “It’s eye opening to see what people are using the pay day loans for. We’ve find a large proportion of our customers tend to take out the loans for one off emergencies, such as an unexpected repair bill if their car fails its MOT or the boiler stops working.”
“For example, one of our customer’s told us she couldn’t afford fix her boiler for four weeks because she had to give notice to her building society to access her savings. In the meantime she had no hot water but what she was boiling up in her kettle. Yet another customer who had found a job after eight months of unemployment needed cash to pay for petrol to get to work, but his bank had refused to give him a temporary overdraft until he had deposited two salary payments. What a crazy situation to be in!”
“It’s clear from the result of the Which? survey that pay day loans have gone from being a one off source of cash for an emergency to a vital source of cash to keep people’s lives ticking over. It’s hard to imagine the ramifications of not having this source of cash available. In the old days if you needed the cash you had to go to loan sharks and that’s not something the UK wants to see a return to.”