Payday lenders will offer what appears to be a quick cash solution but here at Scotland’s Trust Deed, we strongly recommend avoiding them as we all too often see the consequences of borrowing from these loan companies which may lead to serious debt problems.
Astronomical interest rates, high charges, a lack of empathy and the deliberate targeting of people on low incomes are the modus operandi of the majority of the ‘short term loan’ companies.
And now it appears from research carried out by one debt charity, that families in Scotland who are struggling to pay for new school uniforms have become the focus of payday loan marketing. ‘Advice’ on how to meet ‘unexpected school costs’ has appeared on the websites of several unscrupulous lenders.
It’s a difficult time of year for low income families. The summer holidays see the free school meals and childcare that school provide taken away. Extra money must be found for food, new school uniform, equipment and entertainment. At the same time the child free hours needed to do the overtime to pay for it disappear.
Financial worry and stress that parents must be under
The financial worry and stress that parents must be under to even consider the terms for a short loan means we would urge them to pause before turning to payday lenders who will charge an incredible 1,333% APR interest on some loans.
To put that into context, a loan of £200 – the average cost of a new school uniform – over six months will cost £387. That’s a lot of money.
And if the customer defaults or pays late, the charges, interest and vicious circle of debt can rapidly spiral out of control.
Wonga, a payday lender who faced accusations that it was toxic and immoral, collapsed under the weight of public outrage.
When asked for comment about the rates of interest being charged, only one payday lender was prepared to speak out and they said: “The interest rates reflect the risk of unsecured lending.”
It is a risk these companies are happy to take as they know they will gain further income from charges, re-financing and interest.
Knowledgeable team at Scotland’s Trust Deed
The friendly, knowledgeable team at Scotland’s Trust Deed have years of experience in helping clients with debt problems. We advise and help with creditors and then support you to make better financial decisions in future.
This has to be a better option than a quick fix loan that will only lead to further debt so contact Scotland’s Trust Deed’s friendly debt advisors today to see how they can help you become financially stable again.