Doing the payday loans sums – how debt can double in three months or triple in five

Borrowers are being warned that short-term, high interest lenders do not have to give examples on their websites of exactly what happens if debts are not paid by the agreed date.

By law, they must show an annual percentage rate (APR) for all loans, and explain what happens if you cannot pay in full when repayment is due.  However, they don’t have to set out any examples – which would demonstrate just how quickly fees and interest rates rack up.

In most cases, this can quickly lead to debts doubling.  In some cases, with companies that allow borrowers to “roll over” their loans – where the amount borrowed and the first month’s interest is held over for a month and the borrower “only” pays interest and fees on that whole sum for that month – the total debt can triple.

For more on this story, go to: http://www.thisismoney.co.uk/money/cardsloans/article-2211911/Pay-day-lenders-hitting-customers-sneaky-fees-extra-charges.html