Borrowers turning to ‘doorstop loans’

An increasing number of British consumers are turning to so-called doorstep loans in an effort to alleviate their debt management problems, it has been claimed.

Research carried out by Equifax on behalf of ITV News recently found that close to one-third of all people that are concerned about their credit rating have taken out an instant loan with very high rates of interest.

In some cases, payday loans can require rates of interest that top two million per cent and for many struggling consumers this can make a bad debt situation worse.

Additionally, more and more borrowers are choosing to stop clearing their credit card debt in order to maintain their mortgage repayments.

Neil Munroe, external affairs director for Equifax, said: “We urge people to talk to their lender if they are struggling with repayments in order to avoid trouble further down the line.”

Meanwhile, a report from Combined Insurance recently suggested that the household bills British families are typically facing have risen by 26 per cent over the past two years.

By Giles Stevenson