All across the United Kingdom, the market demand for payday loans is on the rise. The amount of payday loans has more than tripled over the past four years. In 2015, 1.2 million loans were given and in 2017, 4.1 million loans were distributed. Statistics show that most borrowers obtain multiple loans each year; the average amount of loans taken by a single person is 3.5 at an approximate amount of £294 in each instance.
Payday Loan Interest vs. Fees and Fines
There are several factors that contribute the increasing amount of payday loans. When utility, credit card, car and mobile phone payments are late there are often late payment fees and bank fines attached. Some consumers feel that it is cheaper to take out a payday loan, even with the incurred interest, as opposed to paying these fines. In some cases, overdraft fees from a banking institution will cost more than the actual bill or interest on a loan.
Lack of Available Credit
Unfortunately, the UK economy has experienced a significant downturn. This has affected the availability of credit traditional financial institutions are willing to lend to consumers. However, almost anyone can obtain a payday loan regardless of their credit standing or income bracket. Websites that feature these loans are all over the Internet. One I found was Simple Pay Day, they offer the loan for those with a bad credit rating. This aspect of UK lenders is in contrast to the US-based lenders.
US-Based Payday Loan Companies
Another factor that has impacted the popularity of payday loans in the United Kingdom is the presence of firms based in the United States. Many large US payday loan companies chose to extend their operations in the UK. The United States lenders are attracted to the consumer market in the United Kingdom as the UK is one of the top five largest payday loan markets in the world.
Convenience of the Internet
The ever-continuing growth of the World Wide Web has fuelled a surge in payday loan marketing. Now, most payday loan institutions have a website that offers Internet application forms. Applying for a loan online provides busy consumers with a much-needed convenience, allowing them to obtain a loan without having to take time off of work or even leave their house. Once approved, the borrower can have funds deposited into their bank account within hours. The more business a payday company does online, the less overhead expenses they have. Some lenders do all business online, increasing industry profits across the board.
Despite the most careful planning, unexpected emergencies do occur. While the need for emergency money is nothing new, this issue is the driving force behind the fast loan market in the UK. Advance loans are a quick solution for problems such as vehicle repairs and unforeseen expenses. And, with an increase in the cost of living, the average consumer’s pay cheque does not go as far as it did when the economy was booming.
What do people use these online loans for?
If you need cash whether for a holiday, school fees or untimely and expensive bills then there’s no need to go through the long process of applying for a normal loan, particularly if you don’t need to borrow more than £1000.
You can solve your problems, if you are responsible, with a cash loan which can provide you with a short term fix to help you get back on your feet.
Payday loans began when people would lend one another money (usually friends or associates) with the understanding that it would be paid back when the borrower was paid. This idea gathered momentum and is now a thriving financial industry in itself all over the world.
Many business people are even known to have taken out short term loans as a buffer for their businesses in times of uncertainty.
Of course, these loans should be used responsibly and should not be taken on lightly. They are a superb product in the right context and when repaid on time but failure to pay on time will result in fees and a higher interest rate being applied.
Any prospective borrower should not go with the first company they find on the internet. They should do some serious research into the pros and cons of each company, looking at interest rates and terms and conditions – not just who has the fastest turnaround on applications.
The best use of a short term loan is to balance household finances in a rough patch. Yes you can borrow for holidays, cars and almost anything you wish but it should be remembered that it’s all got to be paid back in the end with interest. Even if the payday loan is paid off at the end of the term you’re going to be left with a dip in the finances so they should be used wisely.
If you are a shopaholic who is likely to have the money burning a hole in your pocket once you have it, the cash is not for you. The funds are designed to be used as a buffer, not as an excuse to spend more!
As you can see they can be very helpful if you’re in a sticky spot with your finances and have helped pull many individuals and even business back from the brink of financial ruin. Used wisely they can be a lifesaver to balance your budget.
Large percentage using for car repairs
Many of us couldn’t do without our cars, particularly people like me who quite literally live ‘in the middle of nowhere’. Dropping the children off at school would be impossible – I’d have to start walking at 6am which wouldn’t go down well at all! As for shopping, well, online ordering would be the only way.
Not having your car to hand when you need it can be a massive source of inconvenience and even be dangerous if you are like me in the sticks and something happens and you need to get to the hospital or suchlike.
Car repairs are as we know not only a real pain, but horrendously expensive, especially as in most cases we haven’t budgeted for this eventuality.
Quick financing for peace of mind
Thank goodness that in recent years quick financing have appeared to ease that crisis. Even the smallest thing like nipping to the shops or getting groceries would be impossible for people like me if I was unable to get my car fixed.
The money can be used for literally anything and everything – and that includes car repairs. In normal cases with minor car problems you would be forced to use it until it quite literally stopped working at all and repairs would be forced through absolute necessity. This would have the double whammy of your car probably being in a worse state than it was when you first noticed the problem.
They don’t require driving to apply. You can do it from the comfort of your own home and know that soon you can afford to have your car fixed and be mobile again – you can even use the funds to pay for a tow to the garage! Of course, these loans can often mean that the money is in your account that very day without lengthy application processes and waiting for weeks on end for your money.
To help you get back on the road you should be able to get from £100 – £1500 to repair your car and don’t have to pay it back until your next payday. This should give you time to get mobile and back to work as soon as possible, taking the worry out of the annoying side of car ownership which we all have to deal with from time to time.
Broken car and no money? Don’t worry; payday loans are there to help you.