• Why Sub prime lending and ‘Payday Loans’ should be a last resort

    It has been reported that almost 70 per cent of the UK population is struggling to pay their rent or mortgage, with almost one million Britons turning to the recent phenomena of ‘payday loans’ to cover these payments according to the charity Shelter.  

    Many people are currently at risk of losing their home, as they are unable to meet their rent or mortgage payments, with over 20% constantly in financial difficulty. This is a rise of 44% in the last two years alone.

    Over the last year, nearly one million people have turned to short -term loans, 2.8 million had used an unauthorised overdraft and 10 per cent of those do this on a regular basis.

    Payday loans often reach rates of up to 4,000% per annum, which is a shocking rate. Payday loans are never a good idea as it’s simply providing very temporary relief and as a result people end up paying very high interest rates in return, which could cause even bigger problems in the long term as they are being buried with more debt.

    This is another example of sub prime lending, which has led to the financial turmoil we are in. These businesses take advantage of people who are just trying to keep up with their day to day commitments and don’t realize they will find themselves much worse off in the long term with larger debts.

    This will inevitably lead to homelessness when tenants are able to pay rents and homeowners unable to pay their mortgage commitments.

    Pay day lending should always be the very last resort, as in most cases the debt problems will only be delayed and increase in severity.

    There are other solutions, if you are a homeowner, there are instalment contracts or property lease options which could mean that you don’t lose your home, can meet your mortgage payments and have a few years grace to get your finances in order.

    If this is something of interest to you and would like to discuss what options are available to you  please call me on 0203 397 7030 or arrange a call back

    About Reena Malra

    Connect with me: Google+ Reena Malra is one of the UKs most successful property investors and mentors. The strategies Reena has discovered and developed over the past few years take the focus off the price and put it on the flexible and convenient payment terms. This is how Reena can structure transactions to really benefit both the buyer and the seller. Reena specialises in property lease options, instalment contracts, rent torent, below market value (BMV), stopping repossessions, joint venture, delayed completion and tenant buyer strategies. She also runsworkshops and webinars, and offers property consultancy services and one-to-one mentoring.

    View all posts by Reena Malra

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