Many U.S. Short term lenders are bringing their form of nontraditional credit
across the pond, seeing a void that cash-strapped consumers in the United Kingdom need filled.
According to The Guardian, the U.K. industry is growing quickly. One web lender, Wonga, is even sponsoring a Premier League soccer team, Blackpool, less than three years after opening its doors. Some consumer advice groups in the U.S. and the U.K. are alarmed by this trend, though many acknowledge that short term loans fill a gap for citizens who are in a financial bind and can't get funding from a traditional lending institution because of bad credit or a quick time frame. In recent years, banks have denied overdrafts to consumers with mixed credits in the U.K., explains the news source. Either in a store or online, customers can borrow small amounts of money, usually around $100, which is then deposited in their bank accounts in as little as 15 minutes. The idea is that these loans are short-term and should be repaid in two to four weeks. "While the interest is extremely high, this is seen as manageable if the debt is paid off as scheduled," writes the publication.