Expensive loans forcing two million people into debt

New figures have shown that over 2 million people have taken out a loan with some interest rates of more than 183 percent. That is a staggering amount of interest and it is no wonder that many are falling quickly into debt as they try to repay their loans.

It is the poorest families who are suffering the most. As they need credit they often have no choice but to lend from a creditor who does not have their best interests at heart. Many creditors charge low income families a higher interest rate because they know that they can get away with it. People who have a good credit history can afford to shop around and get a good deal, whereas people who are on a low income do not have that luxury and they feel that they have to accept any offer they are given. 

Due to the fact that the interest rates are so high, many low income families are now living in poverty. So the charity “Save the Children” has asked the government to spend £4 billion on supporting the families who are suffering the most. As well as that, the charity also wants the government to give grants of £100 to the children who are worst affected, every summer and winter.

It is thought that this extra help would help over 400,000 children who do currently live in poverty. It is because families are in poverty that they resort to high interest loans. When parents are finding it increasingly difficult to just put food onto the table, they do often get drawn in to the temptation of a loan. So by helping them out so that they are earning enough o keep themselves and their children healthy and happy, it would cut a lot of personal debt out.

Overall millions of people in the UK are living in poverty. It is these people who are most at risk of getting into serious debt and so it is vital that something is done to help them before they have to apply for a loan.