Debt advisory services both north and south of the border have never been busier, providing advice to scores of families who have been pushed to the financial brink due to the seemingly endless rise in the cost of living.
The failure of wages to keep pace with inflation has really tightened the screw and forced families to dip into savings and seek credit in order to make ends meet.
Indeed, it is the second of these so-called options that have really exacerbated the debt problem in Scotland and elsewhere.
☑️ Debtor Desperation
Debtor desperation has led many to consider that loans are the only solution to their money troubles.
Payday loan companies, in particular, have been relentless in marketing short-term loans as a quick-fix when in reality the rates of interest being charged mean that they only add to an already unmanageable debt situation.
If that wasn’t bad enough, it seems that more people than ever in Scotland are now taking out one loan to pay off another, the so-called ‘roll-over’ loan, and becoming entangled in a vicious circle of debt.
☑️ Incontrovertible Evidence
According to recent figures, nearly 160,000 Scots borrowed money to make a loan repayment yearly and Citizens Advice Scotland is in no doubt that this dubious practice is fuelling the growth of personal debt.
Citizens Advice Scotland’s chief executive, Margaret Lynch, has revealed that the pattern where roll-over loans are concerned is very familiar, claiming that they inevitably end up with debtors having numerous loans on the go at once, all of them going towards servicing each other and all of them building up late fees and high interest. It’s not hard to see how debtors quickly lose control in these circumstances and start to drown in their debt.
Rather than express their shock that such a debt servicing method is being used, Citizens Advice has added that some lenders are still targeting the most vulnerable people and encouraging the use of roll-over loans, despite making pledges not to do so. Typically this manifests itself in a situation whereby a customer contacts the company to say they are unable to make a payment, and the company responds with the offer of another loan.
Mrs Lynch, speaking at an event described a situation where there was ‘incontrovertible evidence‘ of a debt issue blighting the lives of many Scottish residents, mostly due to the aggressive marketing strategies of payday loan providers and the emergence of buy now, pay later loans deliberately grooming younger shoppers into a life of debt.
☑️ Roll-Over Loans – The Message
The message to those who either think that loans are the solution to their debt problem or are being offered further loans to pay off existing loans is simple: resist the temptation.
Rather than making inroads into your debt, all they do is add to it and push you further and further into the red.
Instead, seek professional help from Scotland’s number one debt advisory service, Trust Deed Scotland.
If you have any questions, you can always refer to our Debt Advice Scotland FAQ
Trust Deed Specialists
Our team of Trust Deed Specialists offers free, confidential and impartial advice that will get to the root of your debt problem.
With your help, you can implement long-term, affordable and sustainable debt repayment solutions that will allow you to regain control of your finances and ultimately set you on the road to becoming debt-free.
Speak to a Trust Deed Specialist now on 0141 221 0999.