Nov 02, 2013 Simon Williams
It's been widely publicised that entities in the traditional loan industry, as well as high street banks, all but shut their doors on British consumers when the nation was in the throes of the global recession, and alternative finance companies like short term lenders were really the only ones to lend a helping hand. However, some organisations don't seem to remember this now that the economy is performing well again. There has been much criticising of the sector recently in the British media, with representatives from various factions making disparaging comments about the field that allowed many U.K. residents to stay above water and make ends meet in desperate times.
However, some of the rash statements being made haven't always been 100 percent on the mark. In fact, many of the most critical pundits have claimed that short term loans should not be pursued for a number of reasons that simply aren't true.
It might help consumers to know what these comments are and why they shouldn't pay too much mind to them.
Loans are not being used right
According to The Guardian, groups like Christians Against Poverty have claimed that people aren't using the loans correctly, and lenders need to take more responsibility for this. The news source said that these services are supposed to be for fast cash for things like home improvements and holidays.
The truth is, small dollar loans are meant to help individuals with a number of expenses. While lenders do tell their clients that the loans should not be used over and over to make common payments, any unexpected expense can be covered with these sums. Consumers can leverage this money temporarily to keep themselves afloat in troubling times.
Skipping the income question
The Guardian also reported that some lenders fail to ensure borrowers actually have a steady income. However, these practices aren't indicative of the entire sector - a few bad apples operate in every industry, but it doesn't mean that the whole sector is bad.
The fact is that the majority of these companies train their employees to verify income and work information - but this might be a great opportunity for administrators to ensure workers are following these best practices.
It's important for consumers who support the sector and major players in the industry to hold media outlets accountable for their words and ensure that the truth is always being reported. This can help ensure the vitality of short term lending for years to come and make certain that those who need financial help will always be able to receive it.