More Brits turning to payday loans

By Sarah Engle, Wed 4 Jan 2012 - Published in Loans

More people in the UK are turning to payday loans to pay off mortgages and rent, according to new research by YouGov.

The survey for Shelter Scotland found that two per cent of people had resorted to the loan meaning that 936,000 would use "quick fix" payments. Campaigners have warned that the latest trend is "extremely worrying".

Prior to Christmas it was reported that many were turning to the high interest loans to pay for the costly festive period but the new figures have revealed that more are using them to pay for everyday utilities.

Gordon McRae, a spokesman for the charity, estimated that one million people in the UK had taken out these types of loans.

John Lamidey, chief executive of the Consumer Finance Association, added that using short-term loans to pay for mortgages was "simply impossible".

He said: "They are loans for a short period of time, typically a month. If somebody applies for a loan and it was discovered they are in arrears with a mortgage we would not lend and we would steer them to the debt advice agencies."

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