Survey reveals a worrying trend now that payday lenders have been regulated
Guarantor Loan specialist LendFair commissioned a survey which reveals that over 1.3 million adults in the UK will use or be tempted to use a loan shark in the next 10 months and this figure is expected to rise now that new regulations are in place for pay day lending. The survey was designed to highlight borrowing habits across the UK but unearthed a number of unexpected facts that include the following:
Look for the man with the baseball bat accompanied by ‘Terry’ the minder; sorry read Bentley convertible and Cartier watch, accompanied by Harry the martial arts expert. He may well be operating in a pub near you.
“Ok, payday loans are no longer viable since the interest rate cap and absolute maximum on charges was introduced at the start of the year. This means payday loans will dry-up and the loan sharks will take over”.
Few will mourn the demise of the Payday loan companies who can no longer operate profitably after changes introduced by law. Well, few except those that relied on them to manage each month. Changes in the law introduced recently set a maximum interest rate of 0.8% per day and a cap on certain charges that has dramatically changed the dynamics of Payday lending; but the killer blow is likely to be the overall cap that restricts the total that can be demanded at twice the original loan. So, will those same Payday borrowers who can’t get regulated Payday loans now be forced, as some believe, to use the unregulated market by entering the murky world of the ‘Loan Shark’.