Sponsored: Simon Gray, managing director of Credo Asset Finance, says help is at hand to avoid the pifalls of the payday loans trap,

With money struggles part of life for many families, it's easy for people to turn to payday loans for bills and emergency costs. They may seem a good idea at the time but payday loans can ruin your credit score and leave you struggling to pay back extortionate interest rates.

On average 12 million adults use payday loans a year – 69% of them to pay back recurring bills. So why do so many people use them?

Unfortunately, they are so easy to obtain that anyone can get them which is why the typical interest rate is between 1,000 and 6,000% annual percentage rate. As an example, if you borrowed £500 over six months with an APR of 4,000% you would end up paying back an extra £2,702 in interest.

With the interest rate so high why don't more people borrow from other sources or find different methods? It could be a lack of information about loans. It's easy for people to fall in the payday loan trap because there is no information about other options and ways of avoiding loans. It's easy to assume that you won't get a loan, or financial help, elsewhere because you have bad credit. Another reason is payday lenders' vigorous marketing campaigns – they have an abundance of cash and invest heavily in marketing campaigns that avoid the harsh reality of how much money you will have to pay back.

There is no key to avoiding payday loans, just helpful points. Knowing what you're agreeing to when you take out a loan is vital – if you know you can afford it, and read the small print, then you have the upper hand.

Looking for a better alternative may sound obvious. There is a lot of assumption about alternative loans and whether, because an individual has bad credit, they could not attain any other loan. Not the case – there are thousands of other lenders able to help you get a loan with a better rate and help your credit rating.

Credo Asset Finance will help anyone, regardless of credit history, and is certain it can place you with the right lender with affordable payments to buy your new asset and also improve your credit score.

Article sponsored by Credo Asset Finance, 85 Yarmouth Road, Norwich, NR7 0HF.

Phone 01603 703180

Email sales@credoassetfinance.com

Website www.credoassetfinance.com

Twitter @CredoFinance

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