Today more and more people are struggling with debts for guarantor loans and rent to own credit products, Citizens Advice reveals.
The charity states there is a change within the high cost credit market because the amount of people looking for assistance for issues with these sub-prime products has increased by 16per cent during the last 12 months (from 1,962 between April and June 2015 to 2,272 in identical duration this season), even though the amount of people with pay day loan financial obligation dilemmas has decreased.
Over the past one year Citizens information assisted 7,500 people who have lease to possess financial obligation problems, 1,100 with guarantor financial obligation dilemmas and 460 with logbook loan issues.
Because the introduction of a price-cap on payday financing in 2015, the number of people coming to Citizens Advice for help with payday loan debts has fallen by more than a half (53%) january.
The limit means you wonвЂ™t pay back more than twice the amount you originally borrowed if you take out a payday loan.
Analysis through the charity shows clients of other styles of high price credit are spending a lot more than double the mortgage:
A ВЈ3,000 loan from the guarantor loan provider reimbursed over 5 online payday RI years may cost a complete of ВЈ7,114 – 137percent significantly more than the initial loan.
A logbook loan of ВЈ3,000 reimbursed over one year may cost an overall total of ВЈ6,980 – 133percent a lot more than the initial loan.