The UK’s lending industry is one of the biggest in the world, with the payday loans sector accounting for nearly one third of the total borrowing amount in Britain alone. Payday loans are more popular than ever with a number of lenders competing against one another to offer the most attractive interest rates and payment plans in a bid to encourage borrowing amongst UK consumers. As a result, interest rates for the payday loans sector are at the lowest they have ever been.
Over 4 million people took out a payday loan in 2008 which equated to the overall amount of borrowing hitting the £2 billion mark. This figure is expected to hit £17 billion by 2017 with competitive rates and fast application process largely credited with the substantial growth witnessed in the United Kingdom.
Figures released by the Money Advice Service show the most common uses of payday loans with over £500 million of the £2 billion total being spent on funeral expenses for family and friends. The figures released also show a positive correlation in the growth of the UK Funeral planning industry which has now seen an increase in prices with the average funeral now costing £1,800.
Other uses for people applying for a payday loan include emergency/unexpected bills such as a car repair or home improvement bills such as plumbing and heating repairs.
Probably the most alarming figure released by the Money Advice Service was the admission that many borrowers had taken out a payday loan in order to pay for a night out or even an item of clothing. With most cases falling into the 18 – 24 age bracket, the uses of payday loans seem to be somewhat broad. it’s clear that the easy application process and very fast cash transfers are highly attractive to many individuals in need of additional finance.
Ocean Capital Credit Ltd always recommend speaking to an adviser before applying for a payday loan.