Borrowers risk falling into a debt spiral if they resort to a payday loan, so it may be worth researching alternative longer term solutions to your cash flow shortfall, especially if you are finding problems on a regular basis. Consolidation loans or mortgages can offer a valid alternative.
Research from the Competition Commission has found that around half of payday loan customers either roll over their debt or take out another loan within 30 days, while a third of them end up being late in paying back the lender, which can result in excess charges.
The organisation reckons that each borrower would take out three or four extra loans from the same lender within a year of their first loan, with many of those quizzed explaining that they need the money for food and utilities.
From April, payday lenders will be regulated by the Financial Conduct Authority (FCA) and the commission`s findings will go some way to informing their attitude towards the sector. The FCA has already announced that lenders will only be able to roll over loans twice in the future.
However, there may be an alternative way to redeploying payday loans stacking up is to not take them out in the first place and instead reorganise your finances in the form of a secured loan, which can help to pay off everything you owe in one go and reduce your monthly outgoings.
While you may end up paying more in interest payments over the lifetime through refinancing via, for example a debt consolidation secured loan, you should have more left over at the end of each month so that you can manage your cash flow better and not need to use payday loans.
To look at a refinancing loan for your individual situation, get in touch with First Choice Finance and let our finance team scour the market on your behalf. What`s more, our free quotations are always on a no-obligation basis, so you always have the final choice as to whether to go ahead or not.
Discover more at firstchoicefinance.co.uk or give us a ring on 0333 003 1505 on a mobile or 0800 298 3000 from a landline.
Unsecured Personal Loans
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST
Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home. We Advice Upon & Arrange Mortgages & Loans. We Are Not A Lender.
First Choice Finance is a trading style of First Choice Funding Limited of The Old Courtyard, 103 Buxton Road, High Lane, Stockport, Cheshire. SK6 8DX. Copyright protected 2014-2018.