Young People With Debt More Likely To Get A Payday Loan Than Go To The Bank Payday loans

According to Citizen’s Advice, young people under the age of 25 are more likely to turn to payday loan companies such as Wonga to make ends meet than to go to their bank, mortgage lenders or a bank. credit card provider.

He analyzed 30,000 of the most serious debt problems he sees in his offices and found that while 10% of them were for 17-24 year olds, payday loans accounted for 62% of the credit used by this. age group. Only 8% of the 3,000 young people were in debt because of traditional loans such as overdrafts, bank loans or credit cards.

More than a third of those suffering from serious debt problems were not “Neets” – neither in education, nor in employment, nor in training – according to Citizen’s Advice, but in work.

“Millennials are quickly becoming a generation credit,” said Gillian Guy, Managing Director of Citizen’s Advice. “” {101} Taking out a payday loan in your late teens or early twenties can have significant and life-threatening consequences later on.

Less well-known types of high-interest credit, such as collateral and bad loans, also contribute to the serious debt problem that younger borrowers suffer from. Surety loans are those where someone else is listed as responsible for the repayments if the borrower cannot make the payments, while logbook loans use people’s cars as collateral.

Separate research by the Financial Conduct Authority found that around 40,000 consumers took out logbook loans in 2013, typically borrowing £ 1,000 at a time, although lenders offer sums of up to £ 50,000 . Citizen’s Advice said it expected the number of logbook loans taken to increase 61% this year.

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