Published On: Wed, Jan 29th, 2014 on 6:33 pm

Concern as region sees rise in demand for payday loans

William Ballmann

William Ballmann sees a concern that payday loans are attractive to the younger generation

The number of people in Yorkshire and Humberside considering taking out a payday loan in the next six months has risen, according to research carried out by a insolvency trade body that represents 97 per cent of the UK’s Insolvency Practitioners.

According to trade body R3, six per cent of adults in the region say that they are likely to take out a payday loan in the next six months, double the 3 per cent in the region who were in this position in June 2013.

William Ballmann, chair of insolvency trade body R3 in Yorkshire and partner at national law firm Gateley LLP, sees it as an issue that may be of some concern.

He commented: “While payday or other high-interest loans are appropriate in some circumstances, they are not appropriate for all borrowers or in all circumstances.

“It’s very important that the payday loan industry takes greater responsibility to explain to borrowers not only the initial cost of taking out a loan, but all potential costs too, including the costs of loan ‘rollovers’ or late payment charges.”

The recently released statistics show a contrast with nationwide figures which are continuing to fall and research suggested that payday loans are most attractive to adults aged between 18 and 34.

Mr Ballmann said: “It is still a matter of concern that payday loans are disproportionately attractive to younger generations. It may be that other sources of finance, such as traditional bank loans, aren’t available to these age groups, many of whom will not have had a chance to build up a decent credit rating.

“High-cost credit shouldn’t be the only option.”

About the Author

Hasan Faridi

- Hasan is the founder and editor-in chief of the Yorkshire Standard. A BA Hons graduate from the University of Huddersfield, he has over four years of experience in newspapers, magazines and radio.

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