Many Britons are turning to payday lenders with ultra-high interest rates due to a lack of credible alternatives. With many banks offering limited short-term lending options to borrowers, an increasing number of people are turning to payday loans for short-term cash injections aimed at paying bills and surprise fees.
Payday lenders have popped up in Britain at an alarming rate over the past decade – a cycle that, following aggressive attempts to restrict payday lending in many states, has been called a ‘trans-Atlantic lending migration.’ As short-term lending weakens in the United States, new payday lenders are popping up all over Britain.
There are over 72,000 payday lending companies currently operating in Britain, and a growing number of new lenders opening frequently. While some associate payday loans with vices and short-term thinking, a growing number of borrowers are using short-term loans to pay off unexpected bills and recover from limited cash flow.
Economists believe the reason for the boom in payday lending isn’t due to a major employment downturn, but because of limited credit availability for those without the means to turn to major banks. Many banks, as a result of reforms to short-term lending laws, have ceased to offer short-term loans to many would-be borrowers.
The end result is a system that’s overly dependent on payday lending, particularly at the lower end of the income scale. The increase in payday borrowing has resulted in numerous statements from credit counselling groups branding the industry as being predatory and focused solely on profit.
With mainstream credit options very limited, particularly for those without a long-term source of income, it seems as if short-term lending is here to stay. The flood of payday lending in the United States, it seems, might remain in the UK for quite some time indeed.Read more
A recent survey of businesses with a staff numbering up to 250 employees has shown that UK firms are becoming more self-reliant when expanding and have refrained from applying for loans from British banks. According to the Business Monitor, approximately 80% of SMEs did not find the need to discuss getting loans or overdrafts within the past 12 months and these same businesses do not intend to apply in the foreseeable future.Read more
Mortgages September 16, 2011
More bad news for students and those looking into higher education – though not exactly groundbreaking news – according to new reports, that growing student debts will lead to a reduction in the number of mortgages available to first-time buyers according to mortgage brokers Trinity Financial Group.Read more
John Prescott, former Deputy Prime Minister, had promised to help reduce the cost of homes for first-time homebuyers with homes that were to cost £60,000. Unfortunately, here it is 7 years later and that plan has not only fallen flat, it never came to fruition in several markets.Read more
A price war between personal loan companies is driving down the costs of borrowing, benefiting consumers looking for low rate loans. The Financial Times reports that despite the Bank of England Base rate being on hold since March 2009, banks and building societies are continuing to lower the rates on their personal loans in an attempt to attract new business.Read more