Finance News

Payday Loan Lenders Misunderstood

UK payday lenders have claimed that they are being tarnished unfairly by politicians who don’t understand the value of the service that they provide.
The divide in the perception of payday loans by politicians and the people who actually use the lending services according to the Consumer Finance Association (CFA) who said that most borrowers think that they are getting a good service.
A study on payday lending carried out by YouGov, which surveyed 300 people who have borrowed from Money Shop, a payday lender and 300 politicians. Some of the results highlighted in the study showed that 12 per cent of politicians thought that payday lenders explained their fees and charges clearly, which were very different to the 89 per cent of customers who actually used the services.
Another differing opinion is respect. 89 per cent of borrowers said that they believe short term lenders treated people with respect while only 12 per cent of politicians thought the same.
According to the survey, half of the customers use payday loans once a year or less. 6 per cent of customers use short term loans monthly. The CFA said that most customers use short time loans to “smooth out the peaks and troughs of their finances”.
John Lamidey, who is chief executive of the CFA, said: “Payday loans can be misunderstood by politicians concerned for the welfare of their constituents in tough economic times.”
“This research clearly shows that the people who actually use payday loans are extremely satisfied with them at every level.”