Have you ever applied for payday loans?

Its much like the 'Brighthouse' lot.
They should all be regulated, if not banned outright.
That would mean something more humane being put in place though, I think.

I agree MOnica those rates of interest are prohibitive but they target desperate people who can't get cash any other way. I thought the Government had already taken action against these companies.

Be careful MOnica you'll have Gabriella G54 on your back.

Some of the Payday loan companies charge scary amounts of interest. I saw an advert the other day where the "typical" APR interest was 1294%!!

Twinflower Is it truth that they lead to a debt cycle?

Yes, it is, without a shadow of a doubt. People who literally have nowhere else to turn take out these loans, often without understanding the exhorbitant rates of interest, or knowing they will have to make massive repayments, but seemingly having no other choice. I cannot understand why the government doesn't legislate against this 'daylight robbery'.

I agree with M0nica, I think that such loans should be made illegal and/or interest rates should be capped. A much more affordable alternative to a payday loan is a loan from a credit union. There’s a cap on the amount of interest they can charge – 3% a month or 42.6% a year APR for England, Scotland and Wales, 1% a month or 26.8% APR for Northern Ireland.

Gilly, some local authorities do give loans under exceptional circumstances, as do a few other organisations, but these are generally not publicised for fear of lenders being overwhelmed. When people are desperate they do what they need to do in the moment; robbing Peter to pay Paul is sadly how many families survive.

I have confused lenders and borrowers in several places. I am sure readers can work it out.

I would never condemn anyone for taking out a pay day loan. For those whose income is small and possibly uncertain, where else are they to get a lone for that sudden emergency, banks and the usual channels will not lend to them.

I can see the loans from the point of the payday lenders. They are lending to people who are poor credit risk, who are much more likely to default so interest charges must higher, otherwise the lenders would go bust.

However most lenders know they have their lenders over a barrel and many of their rates are extortionate. I think the government should regulate the sector and cap the rates that can be charged.

Thankfully I have not, but know a few people who have. Desperate times can often call for desperate measures.

How can anyone borrow from a friend or relative when they are as poorly off (if not worse) that you might be?

So easy to condemn when you haven’t been in a desperate situation yourself.

I just wish there were better regulations on these loan companies or better still a loan fund that people could turn to in times of desperation, that charges a fair interest rate.

Depends on your situation. Personally I would try to borrow some money from my friends or family

“Neither a borrower nor a lender be
For loan oft loses both itself and friend”

Shakespeare was on point ?

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No sane person would apply for a pay day loan the interest rates are absurd. So of course they trap people into a debt cycle. The people that use them are usually desperate and borrow to get themselves out of a hole when in fact they are just digging a bigger hole.