PAYDAY loans are three times as popular as loans from credit unions amongst people in the North West, according to a new report by R3, the insolvency trade body.
In a survey by R3, six per cent of North West adults questioned said they had taken out a payday loan in the last six months, compared to two per cent who said they had had a loan from a credit union.
Richard Wolff, North West regional chairman of R3 and Head of Corporate Recovery and Insolvency at JMW Solicitors in Manchester, said: “Credit unions are often touted as an alternative to payday loans but on this evidence they have a lot of catching up to do.
“Payday loans have become one of the default options for those trying to tide themselves over from one month to the next but there really do need to be alternatives.
“While high-cost, short-term credit might be helpful in some circumstances, payday loans are not a long-term option. They ultimately only dig people with debts into deeper holes.”
According to the survey, 5 per cent of people in the North West said they expected to take out a payday loan in the next six months, compared to 12 per cent a year ago.