Some time has passed since the United Kingdom bounced back from the recession. Now, the economy is dealing with the big clean-up, and the new coalition government is giving this a go by introducing severe austerity measures. These include slashes to public funds and a rise in the VAT rate. But is the United Kingdom getting any better at coping with money?
If the latest surveys are anything to go by, regular British consumers are getting better at paying off their outstanding debts, yet that does not mean that they aren’t accumulating new ones. Saving has gone up, so obviously there is a pattern which proves that individuals are more wary about how much spending they undertake. But a survey could simply attest to an overall picture for an entire nation. Truthfully, personal debt is still very high and there are masses of consumers who have a hard time with money every day.
On an almost daily basis, there are new warnings about shady lenders such as loan sharks, which sell criminal payday loans to individuals who are in dire need of money. Loan sharks are not registered as official lenders, and usually demand extortionate rates, which the individual wouldn’t manage to pay back. When the borrower finishes in further debt with the loan, the loan shark will either hand out more money at even higher rates or introduce threatening or violent behaviour to dictate settlement. At no time is it worthwhile going to a loan shark because the situation is likely to end in tears. Yet what about other independent loans on offer these days? What exactly is on offer and which loans are worth the while?
There are plenty of worthy loan products on the UK borrowing marketplace today. These include bad credit loans or wage day loans, logbook loans, personal loans and many more independent credit products. They are not generally provided by traditional lenders but are often found on the internet or in television adverts. Cash advance loans are available to individuals who do not have an ideal credit rating, or who might have been rejected for a credit product from a mainstream bank.
Therefore even if a borrower has been to court for bankruptcy or is jobless, they will in most cases be taken on by payday loans lenders. Due to the fact that the loan taker carries a larger risk factor to the payday loan lender, the borrowing rate on pay day loans are generally a bit more steep than on other loans. This is because the loan taker is more likely to find it difficult to repay the loan, taking into account their past performance with loans. By introducing a slightly bigger interest rate, the loan provider is dealing with the extra risk level. However, payday loan providers are (in most cases) completely legitimate loan providers and won’t employ any of the strategies utilized by loan sharks. To be sure it is fantastic relief to an individual who has money worries, that they could take a loan of up to 1,000 pounds and receive the funds in a short space of time. But if they hold a large amount of outstanding debts, then it might be unwise to borrow more money.


