Are More Brits Turning To Payday Loans?

A new study, by a leading short term broker site, Cash Lady has indicated that applications for short term loans are up by a quarter when compared to the same period last year.

Analysing borrowing habits of over 200,000 loan applications across the summer periods from June–August last year with the same period this year, the figures show there has been a significant increase in the number of people applying for short term loans. Not only have these figures revealed an increase in the number of applications, but the age of the borrower and the period of time over which the loan is taken out are also on the increase.

Comparing the figures between the 1st June and 31st August 2015 with same period this year,it was discovered:

• 16% increase in loan value
• 27% increase in loan applications
• 53% increase in loans being taken out for 2 months of more
• 31% increase in loan requests from private renters

The analysis also revealed the demographic of people taking out short term loans has changed:contrary to pre-conceived notions, it is the older generations who are turning to these sites for additional financial help.  The figures showed a 45% increase in short term loan applications submitted by people aged between late-forty to fifty-somethings.

There are also changes to be discovered when breaking down the figures geographically: London has shown the sharpest increase in loan request amount with the average application now being received averaging at £330, which is £39 higher than the average amount for the rest of the UK (£291) and £80 higher than this time last year.

So what does this mean?

With financial fluctuations following the shocking announcements of both Brexit and the Trump presidency, can people really be surprised that Cash Lady are reporting the biggest shift in consumer borrowing since their launch in 2008? The move to favour longer repayment terms seems to be a response to the increased cost of living, economic uncertainty and the lack of confidence people have in their own financial stability.