THE boss of a company which helps people with money management has warned people struggling to pay bills not to turn to payday loans.
Adrian Nichols, managing director of Evesham Debt Advisors, spoke out after worrying statistics were released by the charity Shelter revealing more people are resorting to the quick fix loans, often coming with enormous interest rates, just to cover their rent or mortgage payments.
Mr Nichols said the company had helped hundreds of people in the Vale of Evesham who had taken out this type of loan.
“We had one particular case where they were paying £2,000 a month in payments to four or five payday loan companies,” said Mr Nichols. “As a result they stopped paying the priority debts of their mortgage and they very nearly got repossessed. We were able to stop that and got them back on track.
“They were a couple in their forties with a teenage son living at home in a Worcestershire village. We also have people who haven’t been able to pay their rent.”
The figures released by housing and homelessness charity Shelter show rent inflation in Wychavon increased by 3.7 per cent in the last year and that average monthly rents were £596.
They also reveal one in 12 renting parents nationwide have been forced to borrow cash from their children to cover their bills and one in 33 has taken out a high interest payday loan.
Mr Nichols added: “There isn’t a social sector this hasn’t hit — it is not necessarily unemployed people. It has come about because credit is difficult to get these days.
“The APR can be 4,200 percent, nobody has any idea what that means. Often people turn to these loans as a short term fix but they quickly become a long term problem.”
For help with money problems contact Evesham Debt Advisors on 01386 760000 or e-mail office @eveshamdebtadvisors.co.uk.