Video transcriptPeople who take out payday loans could be paying £45 million more than necessary each year due to a lack of competition. There are plenty of other ways to raise money that you need at lower interest rates, such as personal loans, homeowner secured loans, remortgaging and even guarantor loans. However these options are ideally aimed at when you need a larger amount over a longer term.
The Competition and Markets Authority (CMA) has indicated that many users are more bothered about speed rather than cost, and that some kind of comparison site for payday lenders could encourage more people to shop around for better deals.
Typically, each one of these loans amounts to £260 and is paid off in three weeks, although a lack of transparency over fees can add between £5 and £10 to the price. On average, each user will take out six of these loans a year, meaning they could be paying up to £60 more than necessary.
However, taking out any of these kinds of loans could be a sign of a slippery slope if you are having to keep using them to make ends meet and are borrowing larger amounts. If you find this is happening take financial stock of your situation and see if you can make cutbacks to avoid using loans to meet every day bills. If you have amassed a set of credit cards and loans which are hitting your cashflow every month then you may want to consider a larger loan over a longer period to ease your cash flow problems. Homeowners can look into a remortgage or homeowner secured loan as well as personal loans, as a way forward.
The key is only borrow what you can afford to pay back, for help looking and discussing your credit position and what borrowing options we may have available from our product providers call or finance team on 0800 298 3000, or 0333 003 1505, alternatively visit firstchoicefinance.co.uk and enquire on line. All quotes are provided without any obligation.
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