Cap on Payday Loans
Posted by Vicky James on 6th February 2012 to Debt News
Payday loan lenders Wonga have announced this week that they will sign an agreement to put a cap on how many times a borrower can defer payment to 3 months. Currently a borrower can defer payments on a month by month basis if they can’t afford to repay on the agreed day, however this incurs more charges, thus leaving those vulnerable to debt, falling into further debt problems.
Payday loans, if used in the correct way can be beneficial for some and are often a cheaper alternative to the majority of bank overdrafts, however there is the risk that the people that are borrowing from such lenders are at high risk of deferring, hence the huge APRs which in some cases is at an average of 4000%.
As with all forms of debt, they key is whether the borrower can manage it and keep up repayments. Many people never struggle to repay their mortgage, credit card, car finance commitments; relying on dipping into savings should any kind of financial emergency arise.
However, some find it difficult to prioritise their debts and fall behind with repayments, thus falling into debt problems. The key here is to identify that there is a problem and seek help and advice on how to get back into control of finances, looking at areas where cut backs can be made to ensure priority debts are repaid.
If you have been in a receipt of a payday loan more than twice in 6 months it may be beneficial for you to look at a long term debt solution to help you to get on top of your debt and gain the key skills to avoid debt problems in the future.
Vicky James
DFH Financial Solutions offer a range of debt solutions tailored to your individual circumstances. These include IVA, Debt Management Plans & Debt Consolidation Loans. If you are worried about debt, contact of our train debt advisor's today.
Payday loans, if used in the correct way can be beneficial for some and are often a cheaper alternative to the majority of bank overdrafts, however there is the risk that the people that are borrowing from such lenders are at high risk of deferring, hence the huge APRs which in some cases is at an average of 4000%.
As with all forms of debt, they key is whether the borrower can manage it and keep up repayments. Many people never struggle to repay their mortgage, credit card, car finance commitments; relying on dipping into savings should any kind of financial emergency arise.
However, some find it difficult to prioritise their debts and fall behind with repayments, thus falling into debt problems. The key here is to identify that there is a problem and seek help and advice on how to get back into control of finances, looking at areas where cut backs can be made to ensure priority debts are repaid.
If you have been in a receipt of a payday loan more than twice in 6 months it may be beneficial for you to look at a long term debt solution to help you to get on top of your debt and gain the key skills to avoid debt problems in the future.
Vicky James
DFH Financial Solutions offer a range of debt solutions tailored to your individual circumstances. These include IVA, Debt Management Plans & Debt Consolidation Loans. If you are worried about debt, contact of our train debt advisor's today.
