Jan 28, 2014 Philip Burgess
As in any other industry, there are often best practices that patrons of the short term lending industry need to be aware of before they buy products or services. Because the majority of companies in this sector are legitimate and want to ensure their customers have as much information as possible ahead of time, this shouldn't be a problem. After all, if people don't know exactly what they're getting into before they take out a loan, there's less of a chance the lender will be paid back on time. So, educating consumers is in the best interests of all involved.
However, people might sometimes become confused about exactly what they should be using their loans for. As U.K. short term lenders will tell them, these sums should only be used as a means of paying for unexpected or surprise expenses, not staying current on bills that they expect from month to month.
That being said, the BBC recently reported that research from charity Shelter revealed that of British consumers who rent their homes or pay mortgages, 2 per cent took out short term loans between Jan. and Nov. 2013 to pay for living arrangements. While this a small segment of the population, lenders and individuals can work together to decrease this figure further. In fact, the source detailed that both Shelter and lending companies are urging individuals to find help for financial issues.
One thing leaders at these businesses might want to do is explain the types of payments for which taking out a loan would be acceptable. For instance, alternative finance solutions could be exceedingly helpful in the event of a car accident that requires parts to be fixed or home repairs to be made after a destructive storm. This way, the individual can remain current on regular bills without having to worry about another charge that they couldn't possibly have saved for.