Could payday loan companies have the answer for people looking for an emergeny loan? Under new Government rules they just might…
According to new Government rules people applying for grants or emergency loans will be unable to make repeat claims within a year of applying.
At the moment vulnerable people, such as those on low incomes, can get cash for household goods such as cookers, sofas or other furniture and then re-apply again for the same item after 28 days.
The period is to be extended to a year to bring it in line with manufacturer guarantees covering faulty products.
Work and Pensions Minister, Steve Webb, announced changes to emergency loans and community care grants in a written statement to MPs. He said that the Public Accounts Committee had suggested that more needs to be done to prevent abuse of the scheme.
Unfortunately this could make things very difficult for struggling families and people on low incomes, however, payday loans or other short term loan products could be the solution.
Payday loans are essentially 1 month loans between £80 – £1,000 that are then repaid on your payday. As a short term solution, as long as they’re paid off quickly, they could really help low income families out in an emergency.
A spokeswoman for the Department for Work and Pensions thinks otherwise, saying that the changes were aimed at restoring common sense to the system, adding:
“People will still be able to claim for the same items in exceptional circumstances, and will still be able to claim for different items if necessary.”
Only time will tell if this really is the case…