Worrying News for some Payday Loan Customers

Over the last couple of years, millions of people all around the United Kingdom have taken out payday loans in order to get some much needed finance. However, over the last couple of months it has been announced that some of these people who took out payday loans have been blacklisted by some financial institutions such as banks as they class some of these borrowers as “too risky” to lend to.

Many families have found themselves in extremely tough situations and felt as if payday loans were there only option to get money that they desperately needed to pay off electricity bills, car repairs etc. but there have been some payday lenders who have taken advantage of this and charged some customers up to 16,000% APR.

This can often lead to the people who have taken out the payday loan to get themselves in an even worse situation and since a lot of payday loan lenders have been sharing consumer their data with credit reference agencies. Banks and other financial institutions then can access this data and may notice that they didn’t pay back your payday loan in time leading to a decreease in their credit worthyness..

However, payday loans can be very useful at times, as Richard Griffiths (spokesman for payday lending trade body the Consumer Finance Association) said that “Payday loans are designed to smooth the peaks and troughs of a person’s finances and the vast majority of customers repay in full, on time, so taking a payday loan is certainly not a sign of financial woe and should not be seen as one.”.

Rob Briggs, Director of lending at payday lender http://www.quickpaydayloans.co.ukcommented “to assume that because a customer has taken out a payday loan they are not credit worthy is totally unfair. People do use these loans irresponsibly but the majority of people use them exactly as they are intended - as an occasional source of cash funds. This does not mean that they are in dire straits financially and to assume so would be presumptuous.”.