The popularity of short term loans has been growing lately, with new estimates pointing to as many as 2 million Brits taking out short term loans.
The news comes from a payday advance company which launched four month sago in the UK. The company, Ferratum, which has operations in 17 countries around the world, has reported rapid business growth since it opened its doors this past July.
During the 2009-2010 financial year, in excess of 1.2 million Brits took out short term loans. However, Ferratum remarked that more than 2 million Brits are now using the same day loans if its growth figures can be extrapolated to represent the entire British marketplace.
Sales and marketing manager for Ferratum UK, Ian Porter, remarked that short term loans may be the fastest growing sector in the financial services industry. Mr Porter reported that Ferratum found that people appreciate the flexibility short term loans offer them, as they have the ability to borrow as little as £50 to as much as £300 and have a maximum time period of 45 days to repay the loan.
Mr Porter said that, in the event that Ferratum’s own business growth is increasing at the same rate as the other providers of short term loans in the UK, there is a high likelihood that more than 2 million British consumers have availed themselves of the services of a payday advance company. More and more Brits are turning away from traditional lenders and their long term loans due to the inability to pass a credit check, even though short term loans carry higher interest rates and tougher penalties for default or even missing a payment.