One million Brits use payday loans every month

by Ed Bowsher on 12 September 2012  |  5 comments
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A million people take out a payday loan each month to help pay the cost of household bills. That's shockingly high.

It’s sad to see that way too many people are struggling to keep their finances on track. New research from Santander shows that not only are a million people taking out a payday loan each month, Brits are also borrowing £2 billion every year from the payday loans industry.

Taking out a payday loan is almost always a bad idea because the interest rates are so high. For example, Wonga.com is currently charging 4,214% a year in interest.

Supporters of payday loans always stress the fact that payday loans are meant to be short-term loans, so few borrowers should end up paying that much interest. But even a one-month loan can be fearfully expensive. If you want to borrow £300 for one month, you’ll have to pay £95.89 in interest and fees.

If you’re tempted to take out a payday loan, there is almost certainly a better option out there. Read The best alternatives to payday loans to find out what you can do instead.

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