According to recent research, people in the North West are taking out fewer payday loans than before, indicating that their popularity is falling.
This information comes from R3, a trade body for insolvency practitioners, who carried out the research. They found that the numbers of payday loans used has declined gradually in the last 18 months, when it last peaked.
In September 2013, eight per cent of adults from the region said that they had taken out a payday loan recently. However, when asked this time around, only two per cent of adults asked said that they had recently used a payday loan.
“Payday loans have been steadily falling in popularity with consumers. More recently the decline could be related to the new regulations on payday lending which came into force in January and aims to protect vulnerable lenders,” said Richard Wolff, of R3 and law firm JMW.
“Over the longer term, it could be that there is less demand for payday loans as household finances are improving. Our figures show that the amount of people who say they struggle to make it to payday has fallen from 51 per cent to 38 per cent in the past 18 months,” he continued.
In January, changes were made to the law in an attempt to protect payday loan customers, due to many lenders charging high interest rates and late repayment fees. This has contributed to a number of firms closing down, with lending decreasing, The Consumer Finance Association has said that loan approval numbers have decreased by 75 per cent since its peak in 2013.