According to recently released statistical data, the use of no credit check short term loans is on the rise in the UK, with four times as many Brits using these short term loans in 2009 than they did in 2006.
1.2 million individuals in the UK availed themselves of short term loans in 2009, with a sum of £1.2 billion in total lending sums. 3.5 million Brits alone are expected to take out one of these highly popular loans over the next six months, research also said.
Vincent Bond & Co’s managing director, Steve Rees, said that payday lenders have become increasingly ppular since the beginning of the recession in 2009. However, attempting to manage massive debt by taking on more through the use of payday lending can lead to many types of problems, Mr Rees cautioned.
Using short term loans as long term solutions for debt can make matters much worse, the debt advice firm’s managing director also said. He did say that illegal loan sharks are even worse, as damage to your credit score could be the least of your problems if you fail to make a repayment.
The research findings also demonstrated that job losses are leading many to fall into debt. One of the firm’s clients reported that he had to relocate in order to find work after being made redundant during the recession, but as his new job paid less than his old one, his debt levels began to increase to unmanageable levels.
The research study also discovered that bankruptcy was rated as overwhelmingly effective in regards to finding solutions to problems with debt, as a massive 93 per cent listing the solution as a successful one.