According to the Financial Ombudsman Service (FOS), even higher earners are  falling foul of payday lenders nowadays.

Martin James of the FOS – quoted by Holly Thomas in the Sunday Times on 2 June –  said that “in some cases, lenders (that’s both payday lenders and mortgage providers – Ed.) were found to be unsympathetic with borrowers on higher earnings, assuming they were not in financial difficulty because of the high value of their homes. Many asset-rich people are cash-poor.”

In cases of payday lenders “assuming they were not in financial difficulty”, that sounds like a good excuse. But I don’t imagine too many people would seek funds from a payday lender unless they were in financial difficulty, even if it were only a temporary cashflow problem. And the lenders must know that.

Holly Thomas’s article continues with advice from a variety of impartial experts on how to clear debts:

• Don’t prolong the situation.
• Consider downsizing your home if it’s feasible. (That of course assumes you can sell in today’s market.)
• Ask your lender to vary the terms of the loan; e.g. to extend a mortgage term, or even switching to interest-only. (but the latter only for a period – Ed.)
• Negotiate a debt management plan with the help of one of the free advice services. (National Debtline, Citizens Advice or StepChange)

WANT TO KNOW MORE?

For the full Sunday Times article (but note there is a paywall), click HERE.