UK payday advances - Introduction
Payday loans in the UK are a fairly new invention. Only really gaining momentum in the last 5 years. This increased popularity has stemmed from a mixture of different factors - the main one being perhaps the lax economy being felt at present in the country.
This swift change from boom to bust happened as quickly as it happened the other way, this caught thousands of Brits with their trousers down and up to their eyeballs in credit card payments and mortgage arrears. The era of the 100% mortgage had truly left its mark and where once customers were receiving notices advising them that their limit had been raised every month, this was now replaced with letters stating that they were now expeceted to reduce the balance drastically if not totally. Banks were well and truly stuffed and they tried in vain to reduce the deficit by calling in their debts. We all know how this story ended.
It is little wonder then that banks restricted lending drastically. This has seen those needing a loan having to turn to other sources such as the new type of payday loans online that customers are approved for regardless of credit history. This has been a help to those and perhaps sometimes the only option for when customers have got themselves into a financial mess.
This swift change from boom to bust happened as quickly as it happened the other way, this caught thousands of Brits with their trousers down and up to their eyeballs in credit card payments and mortgage arrears. The era of the 100% mortgage had truly left its mark and where once customers were receiving notices advising them that their limit had been raised every month, this was now replaced with letters stating that they were now expeceted to reduce the balance drastically if not totally. Banks were well and truly stuffed and they tried in vain to reduce the deficit by calling in their debts. We all know how this story ended.
It is little wonder then that banks restricted lending drastically. This has seen those needing a loan having to turn to other sources such as the new type of payday loans online that customers are approved for regardless of credit history. This has been a help to those and perhaps sometimes the only option for when customers have got themselves into a financial mess.
Economics of the payday loaning system
There are those that feel this sudden increase in payday loans will eventually fizzle out in the same way that the same day loan sprung to life. This feeling is backed up by the view that those using the service will eventually either a. exhaust all lines of credit before going bankrupt or b. realising the lack of value in the product and a return to normal lending by the larger financial institutions turn their back on payday advances online.
In the same way as the pawn shop has been a staple of the local high street for years, my view is that payday loans will become a similar part of the Internets' landscape for the next decade or two. Who knows no-one can predict the future so we'll just have to wait and see.
In the same way as the pawn shop has been a staple of the local high street for years, my view is that payday loans will become a similar part of the Internets' landscape for the next decade or two. Who knows no-one can predict the future so we'll just have to wait and see.