News that more and more people are turning to payday loans in these tough economic times is worrying, and shows the desperate lengths that people are going to in order to put food on the table, pay soaring fuel bills and keep a roof over their heads.
Some charge an APR of up to 4,200 per cent interest and can initiate a spiral of debt that is difficult to escape.
What concerns us even more is that people often apply for these extortionate loans before considering what support may be available to them in the form of welfare benefits or charitable grants.
People are often reluctant to turn to charities or claim benefits even when times are tough – and the level of unclaimed benefits currently stands at £19.18bn.
Our recent research found that around a fifth of people on low incomes would be prepared to approach a loan shark offering exorbitant interest rates, pile more debt onto their credit cards, or take out an extra loan, rather than applying for a charitable grant.
The perceived stigma means that many people are missing out on free help that could make a difference.
There are over 3,000 charitable funds available which distribute grants worth over £366m-a-year and other help.
Anyone can find out what they may be entitled to by visiting our free and accessible benefits and charitable grant checking service at www.turn2us.org.uk to ensure they are accessing all the financial help possible.
Director of Turn2us