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Almost one million people resorting to payday loans to cover housing costs - Shelter

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Almost one million people resorting to payday loans to cover housing costs - Shelter

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Published by Jon Land for 24dash.com in Housing and also in Bill Payments

Almost one million people resorting to payday loans to cover housing costs - Shelter Almost one million people resorting to payday loans to cover housing costs - Shelter

Almost one million people have used a payday loan to help pay for their rent or mortgage over the past 12 months, according to research published by Shelter.

The charity is stressing the dangers of turning to short-term, high interest credit as a way to help meet housing costs.

Campbell Robb, Shelter’s chief executive, said: “Payday loans may seem like a quick fix, but the huge interest charges mean things can quickly spiral out of control. We know it can feel like there’s nowhere to turn to but no one has to struggle alone – Shelter can help.

“It’s vital that anyone who’s having difficulty paying their rent or mortgage gets advice now. Don’t wait until things reach breaking point later in the year – it could leave your family’s home at risk.”

The YouGov survey carried out on behalf of the housing charity also showed that around 1.5 million people are falling behind with their housing costs - putting themselves at risk of repossession or eviction.

The survey found the number of people constantly struggling to pay their rent or mortgage has increased 44 percent over the past year, with 7.8 million people now facing a monthly battle to keep a roof over their heads.

Mandy, a mum of three from West Sussex, took out a payday loan after falling behind with her rent. She explained: “I felt I had to take out the loan but found I couldn’t pay it back the next month. It’s just made everything ten times worse. I am at my wits end and it can just feel completely hopeless.”

Shelter is warning that as austerity measures start to bite this year more people who are already feeling the squeeze could be at risk of homelessness.

Campbell Robb added: “We’ve already seen a rise in demand for our services as more and more people struggle to keep up with their rent or mortgage. Sadly they’re discovering there is little left of the housing safety net that was once there to help them get back on their feet.”

Russell Hamblin-Boone, Chief Executive of the Consumer Finance Association, queried the survey's results.

He said: “We would question that a survey of just 101 payday loan users is an accurate representation of the entire payday market and it is not the message we hear day in and day out from our customers.

"What is true is that with rising fuel costs, food prices, council tax and rent, household budgets are tighter than ever and there is very little slack to cover unexpected expenses. As a result, many people value the simplicity, transparency and flexibility of being able to borrow on a short-term basis to help manage their expenditure.

"We would stress, however, that a payday loan is a short-term option only and should never be used to try to fix larger, long-term debt problems.

“We advise anyone who is regularly struggling to pay their rent or mortgage to get advice from organisations like Shelter or Citizens Advice. If debt is a wider issue, there is free advice available from charities such as StepChange Debt Charity, National Debtline or Credit Action.

Shelter is urging anyone struggling with their housing costs to seek advice early at shelter.org.uk/housinghelp to help them get on top of their payments and stay in their home.

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