Consumer expert Alice Beer explains recent payday loan changes and offers advice on avoiding the pitfalls of borrowing instant cash.
The payday loan industry is one business that is booming in austerity Britain. Short-term lending has increased by four times this year but with sky high interest rates it's thought ten times more people are struggling to cope with the repayments.
However, hope may be on the horizon as just last week, 50 of the biggest Payday loan firms were given twelve weeks to change their practices, or risk losing their licences, after the Office of Fair Trading found evidence of widespread irresponsible lending.
Our resident consumer expert Alice Beer is here to explain what that means for anyone who's taken out a Payday loan and offer her advice on avoiding the pitfalls of borrowing instant cash.
What to do if you're getting into debt
- Talk to your debtor (unfortunately many have been criticised as exacerbating the problem by simply giving a further loan creating a vicious spiral)
- Get debt counselling - but not from someone who is going to sell you something else. If you go for help debt collectors are not allowed to contact you for a month. There are almost as many people out there to help you as there are to sell.
They will help you:
* Negotiate with your creditor to freeze your interest
* Debt counsellors can put you on a debt management plan