News stories about borrowing and the debate about short term loans have dominated the press over the last year. The government’s borrowing was put under the microscope in the recent election, and in common with our rulers we all need to borrow in an emergency.
Use a Short Term Loan Responsibly
This type of borrowing is ideal if you have a poor credit history and need access to funds. Banks have tightened up their lending criteria, and many people can only turn to a short-term lender when they need financial help.
New conditions, introduced this year by the Financial Conduct Authority (FCA) mean that you will have to be able to prove that you can repay a loan by presenting an example of your income and expenditure to the loan company. You must also be able to demonstrate that you are in employment.
The rules were introduced to stop reckless borrowing and to ensure that the rising levels of personal debt in the UK don’t climb any higher. A recent article in The Guardian highlighted the fact that personal debt in the UK was set to rise to £10,000 by 2016.
Only Borrow if You Have to
Unexpected expenses occur throughout life. A new pair of shoes for your child, a broken window at home or even emergency car repairs all cost money. If you don’t have the cash to hand, or your credit card is maxed out, then a short-term loan is often the only solution. Just ensure that you don’t take out a loan for a frivolous reason, that you later regret.