Lie No. 1 – Payday lending is safe to use
When borrowing money, we would all like to be safe in the knowledge that we have borrowed the money from an understanding lender.
Whilst we are well aware that we must repay in full the amount that we have borrowed, we should not have to worry about the lender crossing ethical lines in order to make sure that they recoup their money.
The following story in the Mirror – Payday loan leeches: Suicide dad hounded for cash as he lies in hospital highlights a terrible story of how staff at The Cheque Centre pestered one of their customers for repayments on sums of less than £200 whilst he was in hospital after he had taken an overdose – then proceeded to take money from his bank in full knowledge of the situation.
Lie No. 2 – Payday lending can improve your financial situation
Whilst it may be a fairly equal split between people who turn to a financial institution to improve their finances or to make a purchase, nobody ever turns to a loan to make their financial situation worse.
Portrayed as the ultimate financial quick fix, payday lending has the ability to make a bad situation worse incredibly quickly and should always be viewed as a very high risk proposition.
The following article highlights just how quickly things can spiral out of control as Ami tells her story of how an borrowing just £100 became of debt of over £2000.
Lie No. 3 – They are a form of responsible lending
Whilst responsible lending legislation has been designed to help lenders, it has also been put in place to ensure that borrowers should not be able to borrow more money than they can afford.
One of the big selling points of many this option is the fact that the lender is prepared to skip the pre-agreement checks during the application process.
Whilst this will result in a far greater number of people having their application granted, the lender has no way of knowing whether their customer can afford to pay or not and therefore the borrower can be plunged into financial trouble when they cannot meet the scheduled repayments.
The following BBC article highlights the story of a gentleman from Tyrone who got into debt of more than £5,000 and ended up borrowing from five different money lenders.
Do you know your current credit score?
To cut through the lies told by payday lenders, it is crucial that you know all the facts about your finances.
By visiting Checkmyfile you will be able to obtain the UK’s only multi-agency report which will allow you to view your current rating.
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