Citizens Advice Scotland have urged Scots to avoid payday loans, as there are other ways to maximise their income.
A survey by R3 today shows nearly half the population turning to pay-day loans. In response, CAS Head of Policy Susan McPhee says,
“This report shows what we in the CAB service see every day. Huge numbers of people are really struggling just to make ends meet because, in the words of one CAB client recently, there is ‘too much month left at the end of the money!’
“For these families, pay-day loans can seem like the only option to pay the bills and put food on the table as the month wears on. But no matter how attractive these loans might seem at the time, you have to look at the small print and see how much you’ll have to re-pay.
“The truth is that pay-day loans are usually a very expensive way of managing your own money. They will usually make your financial situation even worse for you in the long run, and really should be avoided - particularly as there are other options available to you.
“For example, you may be entitled to benefits or tax credits that you are not aware of. This might seem unlikely, but in fact CAB advisers regularly find cases of people who are missing out on some sort of benefit or grant - just because they weren’t aware of it.
“If you go to your local CAB they will do such a benefit check for you, and will also give you advice on other ways to maximise your income without turning to high-cost lenders. If you have already fallen victim to a pay-day loan or any other type of debt and are struggling to pay it back, we can help you with that as well. And our advice is always free, confidential and impartial.
“But the best advice on pay-day loans is to give them a miss altogether. They are likely only to make your situation worse, and there are other much better ways of getting through the month.”
For more information, interviews etc., please contact Tony Hutson on 0131 550 1010.
Notes to editors - click to expand/collapse
- Debt accounts for over a quarter of all the cases the Scottish CAB service deals with.
- The worrying thing is not just the numbers of people in debt, but the extent of the debts they are facing. CAB evidence shows that across Scotland, debt levels increased by 50% over the period of the recession, with the average debt among our clients reaching more than £20,000. The number of young people in debt is particularly worrying. Four out of five young Scots have been in debt by the age of 21, and that a third have owed more than £5,000.
- Over 40% of CAB debt client have told us they have gone without food or fuel in order to try and pay off their debts – in many cases because they were being pressurised aggressively by their creditors.