Payday loans 'must not be the first option'

By Sarah Engle, Tue 17 Aug 2010 - Published in Loans

People struggling financially should not resort to payday loans until they have first explored other means of lending, such as a credit union or bank, one expert has claimed.

Mark Lyonette, chief executive of the Association of British Credit Unions (ABCUL), said that payday loans are an expensive way for people to take out a loan and said there are other means of help available which will not cost them as dearly in the medium or long term.

His comments follow a report carried out by Consumer Focus, which found that the number of people taking out potentially costly payday loans has quadrupled over the last four years.

Mt Lyonette explained: "With flashy advertising and quick decisions a payday loan may seem attractive, but can end up being a very expensive choice in the end. Taking the time to work out the best way to manage your finances and budget is the best way to go."

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