As nearly half the population struggle to make it to ‘payday’, a payday loan will become a reality for many. New research by insolvency trade body R3 reveals that 3.5 million adults are considering taking out a payday loan over the next six months.
R3’s research has identified a new group of ‘zombie’ debtors who currently only pay the interest charges on their debt and not the debt itself. One in six individuals are only able to pay the interest on their debt rather than paying off the debt itself.
Frances Coulson, R3 President commented:
“Payday loans are not the best way to resolve debt struggles. We know that many who take them out find them to be a negative experience, often escalating financial troubles.
We hear talk of ‘zombie’ businesses, but seeing individuals run their finances in the same way is troubling. ‘Hanging on’ each month simply cannot be maintained forever. This group will have very few options should interest rates rise or their circumstances change.”
Source: R3 Press Release – 7 December 2011