Mortgage deal repayments & payday loans
Almost a million people have turned to covering their mortgage deal repayments with high cost payday loans, say housing charity Shelter
Shelter said it carried out the research after seeing an increase in the number of people who had used loans to pay housing costs. They advise that families using unsecured borrowing to cover mortgage deal repayments in the past year, is evidence of a debt spiral. Their research showed a further 6 million people, who in the last year, had used other types of credit, including unauthorised overdrafts and credit cards, to help pay their housing costs.
Payday loans are small, unsecured loans which are marketed as a means for people to tide themselves over until their next pay day. The loans attract high interest rates and campaigners argue their high cost means poor borrowers can be sucked into a cycle of debt, taking out additional loans as they struggle to repay their existing borrowing.
Housing minister Grant Shapps said: "The sheer scale of the global slowdown has left many hard working families struggling to make ends meet. So I would urge anyone who is getting into difficulty to seek help in getting their finances back on track. "Assistance can be sought by searching online for the government's mortgage deal help website or by visiting organisations who can provide free, independent guidance such as Citizens Advice. The quicker households act to get help, the more options they will have available to them."
