Credit crunched Brits turn to 2,600,000% loans

As banks make borrowing harder, more Brits are turning to doorstep and payday loans to keep their heads above the water.

A poll by Equifax for ITV News reveals 31 per cent of those worried about their credit rating have taken out a doorstep loan.

However, rates on these loans could be as high as 2.6 million per cent APR.

Furthermore the rising cost of living and freezing of credit means 32 per cent said they were considering stopping credit card repayments to pay for essentials like mortgages.

Neil Munroe, external affairs director for Equifax, said: "Whilst the Bank of England has kept interest rates at five per cent, many lenders are still being cautious and not passing better rates onto their customers.

"This appears to be affecting both existing and new borrowers. Combined with rising food and oil prices which are also taking their toll on family finances it’s not surprising that our survey shows that consumers are looking at ways to tighten their belts."

Some 26 per cent of women said they had felt a direct impact from the credit crunch, compared to nine per cent of men.

As the cost of living increases, 24 per cent of people have cut back on life insurance payments and 29 per cent have reduced pension contributions.

“We urge people to talk to their lender if they are struggling with repayments in order to avoid trouble further down the line," said Mr Munroe.

"Being as well informed as possible is also crucial and consumers can apply for a copy of their credit report to gain a clear picture of their financial status and concentrate on paying off their most expensive debts first."