Desperate Aussies resort to payday loans
Many Australians are turning to payday loans in order to make their finances stretch the month, one Queensland debt collector has claimed.
Speaking to the Brisbane Times, Ben Paris, from Brisbane-based firm Debt Mediators Australia, said that he has seen a sharp increase in the number of people using short-term borrowing to pay off things like credit card bills and car loans.
“In many cases, these are people who can’t afford to pay next week’s rent, need money for groceries or have received an unexpected bill,” he told the paper.
Mr Paris held praise for the government’s attempts to clamp down on payday lending, which can land borrowers in hot water as they struggle to keep up with interest payments that go as high as 400 per cent.
He called on last resort lenders to be more responsible, pointing out that people opting for short-term loans often have large debts racked up on credit cards and personal loans already.
Late last month, the Herald Sun has reported that payday loans have caused both borrowers and investors to haemorrhage cash in 2008, with Amazing Loans the latest of these companies to get its shareholders into trouble.