Wary High Street Lenders Helping Payday Loan Industry

Mon, 28 Sep 2009

New figures from short term loan lender S&U have confirmed that payday loan lenders are continuing to play an important part in helping consumers keep on top of their finances . The lender has seen its loan portfolio remain at pre-recession levels of £75 million, as consumers are turned away by high street banks .

Major lenders have displayed a very cautious attitude towards lending since the start of the credit crunch, with any borrowers deemed slightly risky refused credit. With personal loans hard to come by as consumers look to manage repayments on their debts, short term loan lenders are providing a much needed service.

S&U has actually seen its cash flow and bank balance increase since the start of the recession as major lenders reduce the number of loan products available to miserly numbers. Whilst reasonable interest rates are available to consumers with just a few blots on their credit history, those with chequered histories have been left vulnerable and are faced with interest rates as high as 399 per cent.

Director at financial website The Motley Fool, David Kuo, warned that such expensive loans could prove a false economy, ultimately resulting in deeper debt problems for consumers.
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