Consumers Warned Over Growth in Quick Fix Credit

HERTFORDSHIRE, ENGLAND, October 19, 2010 (Press-News.org) With recent research anticipating that payday loans borrowing is set to triple in the next five years*, potentially bringing new lenders in to the market place, industry expert Gary Miller-Cheevers is warning consumers to take care when choosing their payday loan lender.

Figures* show that GBP1.2 billion was borrowed last year through payday loans, with analysts reckoning that these figures will soar to between GBP2.7 billion and GBP3.5 billion a year by 2014.

With interest headline rates up to 2,700 APR, payday loan providers are often blasted for charging so-called 'extortionate' rates. However, Mr. Miller-Cheevers points out, this rate is based on someone borrowing an amount of money over a year - whereas most payday loans over last for a matter of days or a few weeks "APR for payday loans is a bit like Tesco's pricing sausages by the ton".

Mr. Miller-Cheevers - who is CEO of payday loans company speed-e-loans - says that the research shows that there is a very real demand for this quick-fix finance and, often, borrowing this may work out cheaper than taking an unauthorised bank overdraft.

He adds that 50% of speed-e-loans payday loans borrowers are white collar workers and professionals, including Accountants and Financial Advisers - people who traditionally take care of other people's money for a living and who are financially-savvy enough to know whether what they are begin charged is acceptable.

However, says Mr. Miller-Cheevers, with new lenders coming in to the market place, all customers should be wary of whom they apply to. "With increased competition comes choice - which is a good thing. However, at the same time, cash-strapped consumers should very carefully look at who they'll be doing business with.

"For example, the established payday lenders are very much in tune with the three things that customers want: clear and competitive pricing; penalty free early repayment options; and super-fast same-day payouts at no extra cost. Some new entrants to the market are going to find it very difficult to score top marks on all of these key customer requirements."

Mr. Miller-Cheevers suggests that using an established payday loans company that has a trackable record of responsible lending as well as clear and transparent charges may be a good place to start.

*Datamonitor

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