In years gone by, credit was easy to come by. Not just easy to find when you went looking for it, but there seemed to be a new offer of loan or credit card, zero interest balance transfer with maximum credit limit landing on the doorstep every other morning without you having to lift a finger. And unless your credit rating was exceptionally low, you were almost guaranteed acceptance. Of course, if that’s your circumstance now, there are many online instant cash loan facilities to whom you only have to prove your identity and income to gain acceptance, but the mainstream online quick cash loan providers were a thing of the future, then.
The backdrop at the time was, of course, a booming housing market and homeowners everywhere had new-found wealth in the equity of their homes that seemed to come out of nowhere. Bowled over by the promise of easy cash and house prices rising faster than you could unleash the equity with a remortgage, spending money you didn’t have was very much the chic thing to do.
For two or three years, it was hard to ever imagine this spiral ending as people were offering over the asking price for houses and anyone who had bought their homes at the right time seemed affluent beyond any level they could have imagined being.
And then it stopped. As quickly as it had began, the tap turned on, the supply was cut, with only the exclusive few able to catch the drips being offered by the banks as they, too, were struggling beyond anything they’d foreseen.
It was time to start paying the money back. Many homeowners’ mortgage repayments had doubled, credit cards, which had previously seen limits raised to suit your spending, were now shrinking faster than you could repay the interest. And thousands of individuals, even on half-decent salaries, were finding that they couldn’t make ends meet.
And so was born the instant cash loan. Bridging loans had become defunct as homeowners had hardly dipped into their overdrafts because of transferring credit at zero percent on cards, let alone needed a loan. In any case, the banks were saying no to just about anyone who applied for credit, other than those who had huge amounts of equity in their homes.
And does this seem like a history lesson, something akin to learning about the Victorian and Edwardian eras when you were at school? It may seem so, but when you consider that all this damage has been caused within this Millennium, a mere twelve years from trough to peak to trough, it is easy to see how money in irresponsible hands can lead to a lifetime of financial pain, as many individuals will confirm.
Pay day loan dependence has not grown out of greed by one institution or by the failing of another. It is the dizzy affects of having cash when you’re not used to it that has caused the problem we see today.
On a smaller scale, there is a very definite lesson to be learnt when applying for a instant cash loan. Only lend what you need and if you do find yourself with extra, pay it back, as many wish they had done with surplus cash they had from remortgages – everything has to be paid back, eventually.