Do Loan Companies ‘Prey’ On The Poor?

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Do Loan Companies ‘Prey’ On The Poor?

A new study carried out in the North East has found that loan companies are targeting low income households who cannot afford to repay them.

 

Research has been done by Durham University and they found that many people that took out one of these loans did not even have a bank account, and the people who could access an account it was a basic one with no overdraft and no possible choice to have a credit card. These families that were aloud these loans did not have savings and the ones that did, did not have more than £4, yet these peoples debt ranged from £340 to £10,000.

 

The researchers have said they believe that these families have been preyed upon, and clearly were not able to pay the debt back. It is clear that these borrowers should have done more checks on these people to make sure they were able to pay the debt back. This is why the government are tightening the regulations but Labour has gone a step further by backing some form of cap, and promising a levy on the firms. The money will then be used for making alternatives like community credit unions.

 

Due to loan companies giving out this money without checks it is causing many people to be in a lot of debt that they are not able to pay off. This also makes me struggle more with bills and essentials as they are trying to pay them back, causing some of these people to take out more than one. This is where a debt management solution would be useful and could help them to find a way to pay these debts.

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