Payday loan applications have risen by a quarter, new figures reveal.
Paydaybank.co.uk, the largest payday loans broker in the UK, saw that payday loan enquiries to their website increased 25% from an average of 40,000 per month for the three month period September – November 2009, to an average of 50,000 per month from the three months of December 2009 to February 2010.

“Pay day loans are now mainstream financial products used by thousands of satisfied customers looking for a fast, hassle free form of affordable short term credit,” claimed Ohad Hessel, Marketing Manager at Payday Bank.

An investigation carried out by the Daily Mail in February revealed that the cost of an unauthorised overdraft with the leading banks worked out to be more expensive than a payday loan. Hefty penalty charges alongside additional fees and interest mean going overdrawn on your bank account can result in 3,000% APR.

Just 7% of the population completely trust their banks to treat them fairly and unsecured loan rates are at a 9 year high, alongside credit card rates at a 12 year high. However, the government and the credit card industry have been working to propose a number of proposals designed to improve credit card information and debt advice to those who may be struggling with credit card problems. Read More on Government Changes and Credit Card Information

Speaking to moneymaxim.co.uk, Peter Vicary-Smith of Which? said that Government plans to “enable credit card users to pay off their most expensive debt first are a move in the right direction, but there is still more to be done to ensure vulnerable consumers are protected,’ he said.

’It’s now time for industry to step up to the challenge and offer credit card users clearer and fairer terms and conditions, and weed out irresponsible lending practices.’

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