Improving consumer comfort could boost borrowing

When consumers feel confident in their personal financial situations, spending levels could pick up. As a result, borrowing activity at short term lenders may follow suit, as these consumers could be putting themselves at financial risk.

Spending may rise in the coming months, as the Bloomberg Consumer Comfort Index increased to minus-32.1 in the week ending September 8, from minus-32.3 in the previous seven-day period.

Part of the reason Americans are feeling more confident is the strong employment situation. First-time applications for unemployment benefits declined by 31,000 claims in the week ending September 7, according to the U.S. Department of Labor.

"Stronger job growth may be on the horizon," Millan Mulraine, director of U.S. rates research at TD Securities, told Bloomberg. "When we start seeing improvement in the labor market, I think that will provide another tailwind for confidence, and spending, going forward."

Generally, when spending increases, consumers put themselves at risk of falling short on certain essentials, especially if an unexpected expense arises. Fortunately, there is assistance available should such a situation occur, and it comes in the form of short term lending.

These types of loans can provide people with money fast to help pay their credit card or utility bill after their car breaks down or they have a surprise trip to the emergency room. Without financial assistance, late fees and penalties would likely be incurred, which can be costly.

Short term loans certainly come with fees, but they are often less than what would have been charged if a payment was missed. So, instead of risking having the lights shut off, consumers would be wise to take advantage of this form of lending.