PAY day loans are short term loans which people sometimes take out for small amounts of money to help with household expenditure, sometimes when they are short of money and cannot afford to meet the monthly bills. Payday Loans are easy to get but interest rates are very high and they have attracted a great deal of controversy because of this. They are available from high street shops and the internet but because they are very expensive and not really suitable for long term borrowing there may well be other more affordable ways to sort out your short term money problems. Therefore before you consider a pay day loan consider the issues below :

• Remember Payday loans are an expensive way to help people over temporary problems. They are not suitable for longer-term difficulties.

• A loan from a credit union is likely to be potentially more affordable – check if there’s a credit union in your area.

• you have a bank account, you may be able to agree an overdraft. But be careful of going overdrawn without permission as this can be very expensive.

• If you’re on a low income and need money in an emergency, you may be able to get help from the Social Fund, or from a charity or other help in your local area, for example from the foodbank.

Some new rules about Payday loans:

From 2 January 2015, there is an interest cap on payday loans of 0.8% per day and no borrower should have to pay back more than twice what they have borrowed. Also from this date if you take out a 30 day loan and repay on time you should not be charged more than £24 in fees and charges for every £100 borrowed. If you default on the loan the lender can only charge a default fee of £15.

Generally in the case of Paydays loans you will usually be given up to a month to pay back the money you borrowed, plus interest.

The most common way to pay back a payday loan is through your bank debit card. When you get the loan you agree to let the lender take the money from your bank account. This is called a continuous payment authority (CPA).

If there isn't enough money in your account to repay the loan on the agreed date, the lender may keep asking your bank for all or part of the money. Charges will be added for late payment. However, your lender shouldn’t use the CPA more than twice if they’ve not been able to get the money

If you can’t afford to repay the loan, you can instruct your bank or card provider to stop the payment being made.

For further information and advice, contact your local Citizens Advice Bureau or see www.adviceguide.org.uk.

Your local bureau – South Worcestershire Citizens Advice Bureau at Malvern Heights, Chequers Close, Enigma Business Park, Malvern, WR14 1BF is open:

Monday, Tuesday, Thursday and & Friday 10am-4pm. Wednesday (Specialist Debt Advice - by appointment). Tel: 01684 563611

We also have local CAB Community Liaison Volunteers in rural areas around Malvern as follows:

Leigh, Bransford & Leigh Sinton – Lillian Somervaille – 01886 833526 – lillian@aubretiacottage.org.uk