Instant cash loans supplied by payday lenders, which were once only rarely used, have since become a common occurrence, leading to serious problems for many who have found themselves falling deep into unmanageable levels of debt, experts say.
No credit check short term loans have become much more mainstream than they have in the past, according to Jasmine Birtles, founder of Moneymagpie. However, it’s not just the destitute and desperate that are going to instant cash loan providers for extra cash, as Ms Birtles commented that there are many middle-class workers frequenting these companies as well.
The financial expert also said that pawnbroking shops are also experiencing a large increase in business. She attributed the uptick to consumers that have been stymied by traditional lenders such as banks and building societies, since mainstream lenders have experienced a decrease in willingness to provide credit in an effort to hold on to as much capital as possible.
A good number of Brits have curtailed the amount of spending they do using credit. However, not every UK consumer has done so, with some stubbornly clinging to the need for having large budgets for Christmas and other similar events, to the effect that it is June, July, or even later before they finish repayments for money spent during the festive season.
Even those pulling in decent pay could find themselves in serious financial trouble due to the rates on short term loans so exorbitantly high. Consumers neglecting to clear their debts by the repayment date are often inundated with soaring interest costs and rollover charges.