If you borrow £100 for one year at the following interest rates how much do you pay back? 8% £100 + £8 = £108 15% £100 + £15 = £115 29% £100 + £29 = £129 4214% £100 + £4214 = £4314!!!
What is a payday loan?
Are adverts a reliable source of information? Source: Stanford School of Medicine
Case study "We started off with one loan for £75 over 28 days. We both work in the care industry so don't earn much money and that month we had a couple of extra bills. The loan was for basics – a big food shop. "We found ourselves rolling the loan over again and again, still being short of money every month, and then taking out other loans to cope. We owe maybe £3,000. Of that, £1,200 is a £600 loan which has doubled in 47 days of being late. Paul Stephens, 23, from Cornwall
Trapping borrowers "If you go to the website of every payday loans company they stress that this is short-term lending to meet a one-off need. But in private, these companies are telling their investors different things. It is a system designed to trap borrowers." Uriah King, Center for Responsible Lending, North Carolina
The reality
The Debt Trap Source: Moneysavingexpert.com
Alternatives to payday loans?
Take action!
Summary 8% £100 + £8 = £108 15% £100 + £15 = £115 29% £100 + £29 £100 + £8 = £108 15% £100 + £15 = £115 29% £100 + £29 = £129 4214% £100 + £4214 = £4314!!!