http://cashpaydayloans.org.uk/news/payday-loans/irresponsible-lenders-or-borrowers - There is no point denying it, payday loans have received a lot of negative press over the last few years. This has really escalated...

1. Irresponsible lenders or
borrowers?
http://cashpaydayloans.org.uk/news/
payday-loans/irresponsible-lenders-
or-borrowers

2. There is no point denying it, payday loans have
received a lot of negative press over the last few
years. This has really escalated in the last 12
months as more and more people turn to them. As
a result some organisations are trying to create a
new image for themselves, one that leaves them
looking anything but a payday lender
http://cashpaydayloans.org.uk

3. While the marketing spin has gone into overdrive a
cursory glance at the nature of the loan tells the
full story, these are still short term loans to be paid
over 28 days with annualised percentage rates
(APR) up to and over 3000%. This may seem like a
lot but because the loan is designed to be paid in
under 30 days the actual repayable amount is
really not so unfair. Things become tougher when
people miss payments and have to repay over
months which can lead to impossibly sized
payments very quickly.
http://cashpaydayloans.org.uk

4. Dave Clarke of Loanfinder.TV says: “High interest
loans are not scary if paid back in full on time.
Where they become problematic is when loans are
allowed to roll-over. Usually we market payday
loans at people who need emergency loans to
cover things like repairs on cars or to stop their
basic needs being cut off
http://cashpaydayloans.org.uk

5. What we do not follow is the premise that payday
loans should be used for luxuries. If a person
cannot afford a holiday, they absolutely should not
use a payday loan to enable them”. The phrase,
“roll over” became famous in the US where payday
loans first took off. Nearly every negative story
written about payday loans in the UK is about high
interest charges, in the US they are about people
who got into more and more debt by rolling over
their high interest loans.
http://cashpaydayloans.org.uk

6. The idea that payday loans should be used only in
emergencies is unfortunately not a view that is
shared across the industry and certainly not a view
that is shared by customers. This last Christmas
one of the major lenders in London used phrases
such as “Get your Christmas wishes sorted” and
planted seeds for using the loan to pay for air
flights and holidays
http://cashpaydayloans.org.uk

7. This really leaves me wondering if the lenders have
the borrowers welfare at the forefront of their
minds, Dave Clarke agrees: “Why encourage
people to spend when they clearly can’t afford it.
There are plenty of ways to enjoy your holidays
while spending within your means”.
http://cashpaydayloans.org.uk

8. A positive casestudy
However, while there are loans available people
will take advantage of them, often only seeing the
upside. Liam (24) contacted me back in November
of last year because he wanted to tell the story of
the payday borrower, as he put it “we only hear
the negative side of payday loans”.
http://cashpaydayloans.org.uk

9. Liam had taken out a payday loan not in an emergency
but rather to buy a new guitar. Having no savings and
no real credit history, he used the only thing he could
to get credit: the fact he has a job. He said: “At the
time I couldn’t get a loan from a bank for whatever
reason. Yes the payday loan was expensive and I guess
I could have waited, but in the end I just say my guitar
cost £150 more than it actually did. My wages covered
it so why should I really care. I’ve had 3 extra weeks
playing the best guitar I’ve ever owned, and that was
only possible because I got a payday loan. So are they
evil? No.”. This is surely not an uncommon experience
and you can see a common experience from many
borrowers by visiting forums and looking at feedback.
http://cashpaydayloans.org.uk

10. I asked Liam how he would have coped if he had
been unable to repay the payday loan, his
response was pleasantly surprising: “I spent my
time making sure I could afford to repay the loan.
If there was any chance I would have been unable
to pay back the loan there is no way I would have
taken the loan, it’s not worth the risk”
http://cashpaydayloans.org.uk

11. The big question that still nags me is “Does
everyone think like this when wanting a luxury
item?”, I suspect not. And this leads to the
unfortunate conclusion that there are people who
are clearly irresponsible borrowers.
http://cashpaydayloans.org.uk

12. How to borrow responsibly
Regardless of what type of loan a person is getting
there are always a few golden rules to follow if you
want to be a responsible borrower.
http://cashpaydayloans.org.uk

13. Make sure you can afford the repayments, this
does not just mean your current job but what if
scenarios. What if you lose your job? What if the
car breaks down and needs repairing?
http://cashpaydayloans.org.uk

14. Read the contracts, understand the charges, and
understand what happens if you run into trouble.
Then make sure if you do run into trouble that you
have already planned a solution. Surprises and
money rarely lead to good outcomes.
http://cashpaydayloans.org.uk

15. Don’t lie on your loan application form. The rules
exist to protect you, if you say you earn 3 times
your salary just to get a loan you are falling into
the trap many mortgage borrowers fell into right
before the bubble burst in 2008 leaving many
penniless.
http://cashpaydayloans.org.uk

16. So in short you need to make sure the loan is
affordable in all situations, make sure you
understand the rules and charges, and always be
truthful.
http://cashpaydayloans.org.uk