Newtown hotspot for payday loans
New figures have shown that Newtown is the hotspot for payday loans in Montgomeryshire.
More than 800 Newtown residents took out short-term ‘pay-day’ loans, while in Welshpool more than £200,000 was lent by short-term loans providers in 2018, according to research by finance app Wagestream.
Despite research which shows that payday loans are often a measure of last resort for struggling households, the UK imposes no legal limit on the interest rates payday loan companies can charge, which can range between a “typical APR” of 1,355 per cent and can go as high as 4,000 per cent.
The highest average loan amounts were recorded in Montgomery. In total 131 loans totalling more than £40,000 meant an average sum of £326 was lent to customers.
Elsewhere in Powys, Llandrindod Wells residents paid £263,000 in fees and interest on 1,740 payday loans.
Peter Briffett, CEO and Co-Founder, Wagestream, said: “Payday loans are exploitative, ultra-high cost and plain wrong, so it’s frankly mind-boggling that these lenders are still able to prey on UK workers.
“Financial stress caused by the monthly pay cycle means people turn to payday lenders not out of choice but necessity, so it’s vital we replace this industry with something better.”