Payday loans used to pay for food

Nearly four out of five people who take out a payday loan do so in order to be able to buy food, a survey has found. The survey was conducted among over 1,500 clients of Christians Against Poverty, a Church-based national charity that tackles debt and money management problems.

Key findings

  • 78 per cent of respondents used payday loans to buy food; 52 per cent did so to pay electricity and gas bills; and 32 per cent to meet rent or mortgage payments.
  • More than half had taken out between two and five loans before they called Christians Against Poverty for debt help.
  • A further 16 per cent admitted they had 'lost count' of how many payday loans they had used.
  • 15 per cent of those applying for payday loans had not been asked questions about their income; 19 per cent had not been asked about their work status; and 68 per cent had not been asked about their regular outgoings.

Christians Against Poverty's chief executive Matt Barlow said: 'This evidence shows that people taking out payday loans are not, typically, doing cosy house repairs as most payday lenders would have us believe. People who take out this expensive sort of credit are hungry, worried about keeping warm and becoming homeless'. The charity called for tighter regulations to protect vulnerable people from rogue payday lenders.

Source
: Press Release 1 October 2013, Christians Against Poverty
LinksCAP press release | Guardian report | Inside Housing report

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Publication date: 
Oct 2 2013