1m Brits turn to payday loans to pay the rent
Almost one million Brits have turned to payday loans to pay the rent or mortgage, according to housing charity Shelter.
Its research also found that 20% of households have had to borrow money to cover housing costs.
A quarter said they would feel too ashamed to ask for help if they couldn't pay their rent or mortgage and 40% said they wouldn't admit to struggling with their housing costs to family or friends.
With so many people "suffering in silence", Shelter also reported that the number of people it helped because they couldn't pay their rent or mortgage rose by almost a third last year.
One person who received assistance was Katharine Whittaker, a mum of two from Yorkshire. Explaining her situation, she said: "It's very difficult when it comes to making ends meet and paying for the roof over our heads. The rent takes at least half my wages. It's absolutely horrible trying to juggle the rent and other bills like this.
"I've borrowed money from family and I've had to ask the bank for an overdraft just to keep our heads above water. It's a constant worry thinking about finding extra money."
The charity is urging anyone facing difficulties to get advice early. Shelter can help with negotiating ‘mortgage holidays' with mortgage lenders or help devise re-payment plans for arrears.
Campbell Robb, Shelter's chief executive, said: "We're now hearing from record numbers of families up and down the country who are desperately struggling to keep the roof over their heads. But the truth is, we're more worried about the people we don't see.
"Our message today is don't keep your worries to yourself: Shelter's expert advisers can be the difference between keeping your home and losing it."
Short-term cash loans designed to be borrowed mid-way through the month to tide the borrower over until they next get paid, whereupon the loan is settled. Generally used by people with bad credit ratings and/or no access to short-term credit such as an overdraft or credit card. Like logbook loans, this type of borrowing is hugely expensive: the average APR on payday loans is well over 1,000% and in some instances can be considerably more.
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
“Arrears” tend to be associated with debt. If you fall behind and miss payments on any outstanding debt, the amount you failed to pay is an arrear – the amount accrued from the date on which the first missed payment was due.