Dramatic rise in Fifers turning to payday loans

The dramatic rise in Fifers struggling with payday loans is a cause for ‘grave concern’, according to Dunfermline MSP Bill Walker.

New data shows that the number of Fife clients of StepChange Debt Charity with payday loans almost tripled between 2012 and the first three months of 2013, rising from 11% to 30%. Between 2011 and 2012, the average amount owed increased from £375 to £1,656, though this dipped to £1,385 in March 2013.

Mr Walker said: “The number of Fifers turning to payday loans is a grave concern. The interest rates charged can be extremely alarming, leaving people with no money for day-to-day expenses when they attempt to make their monthly repayment. Payday loans may appear to be a quick fix, but in reality what might begin as a relatively small loan can soon escalate out of control.

“I would recommend any Fifer struggling with debt, including payday loans, to contact StepChange, which is an independent self-funding charity dedicated to helping people repay debts in a realistic timescale suited to their situation.”

Sharon Bell, head of StepChange Debt Charity Scotland, said: “The dramatic rise in problem payday loan debt in Scotland is alarming as this type of debt is expensive and can quickly spiral out of control. Regulators are taking some action, but there are still widespread problems across the payday loan sector.

“It is crucial that anyone struggling to repay what they owe at the end of the month doesn’t just roll their loan over and rack up very high charges, but takes control and seeks advice from a debt charity instead.”

StepChange Debt Charity’s free helpline, 0800 138 1111, is open 8am to 8pm, Monday to Friday and 9am to 4pm Saturday.  Help can also be found online at www.stepchange.org, which includes a dedicated section on payday loans.

Graphic produced by StepChange

Graphic produced by StepChange