Mar 02, 2013 Sean Albert
Residents of the United Kingdom are increasingly turning to alternative short term lenders to provide them with financial relief - on college and car loans, to make down payments on a house or for something as simple as paying the electric bill.
Short term loans represent one of those alternatives, but they have come under fire lately - even if many of those criticisms are being overstated.
"The short term lending industry has seen exponential growth in recent years, so an increase in calls does not mean that problems relating to short term are getting worse," Russell Hamblin Boone, chief executive of the Consumer Finance Association, said recently in a statement. "Our members have been actively referring customers to them as a part of our commitment to supporting those who find themselves in financial difficulty."
In the United States, Americans are using short term loans for a variety of reasons, primarily as a short term lending option that allows them to pay bills or unexpected emergency costs, according to a recent New York Times blog post. The source cited a recent Pew Charitable Trusts study that found that, although some consumers were unsatisfied with these loans, most felt that the conditions were made clear ahead of time.
As with any type of alternative credit, consumers need to borrow responsibly. If they do, short term lending can offer substantial relief for struggling consumers.
In a recent column for The News & Observer, Mississippi Valley State University professor in the Department of Social Work, David Stoesz?, discussed the reasons short term loans have become popular in the United States. He noted the ease with which they are accessible to consumers without the credit history to secure funds from traditional lenders. In addition, short term loans are typically flexible in value, so people can borrow money based on the amount they need.