Christmas pay loans warning

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Sheffield finance expert Phil Meekin is warning local people against taking out payday loans in a bid to tide themselves over the festive period.

Mr Meekin, from insolvency specialist Wilson Field, was responding to separate pieces of research from insolvency trade body, R3 and from Sheffield University.

According to R3, up to 45 per cent of the population struggles to make it to payday, meanwhile, university researchers found that 40,000 people in Sheffield are trapped in debt because they cannot borrow from high-street banks and are forced into taking out more expensive loans.

“Payday loans are not the best way to resolve financial struggles,” said Mr Meekin.

“Many people mistakenly believe that turning to these payday loan companies is an easy option. They often appear to be more accessible than other professional organisations offering financial advice and debt solutions, but it is important that people are aware of the downfalls.”

“If the money is paid back as soon as the next salary comes in, this type of lending can be cheaper than paying out on an overdraft or a credit card charge. The problems come when people are still facing the same money difficulties even when payday arrives.

“If struggling through the month to payday is a regular occurrence, people should seek financial advice instead of turning to ‘quick-fix’ high interest loan options.”