Charity Step Change has apparently supported 66,557 cases of Payday Loan borrowers who get into severe debt predicaments last year. This was an 82% increase on the amount they dealt with in 2012 (36,143).
This shows the rising amounts of people who have turned to payday loans hoping for a way out of their financial troubles since 2012, and is also indicative of the number of people who have fallen foul of them.
The average debt owed by the people who sought help from the charity was 1,647 pounds, which was higher than the average wage per month of the borrowers, which was 1,381 pounds.
Many cases had their debts inflated, according to the charity, through the application charges that the companies tab onto the main loan, as well as the incredibly high interest rates.
The Financial Conduct Authority (FCA) has said it will limit the number of times that loans can be extended in order to reduce debt build up, and has been tasked with capping the amount that lenders can lend on such high interest rates.
Mike O’Connor, StepChange’s Chief executive said that “The widespread harm and misery caused by payday loans continue unabated… We hope the FCA’s proposals will address some of the areas of consumer detriment, but on issues such as affordability checking, rollover and repeat borrowing, there is an urgent need for even more radical reform.”