Perhaps that should be counting for fifteen minutes. That is roughly how long it takes someone to apply for a quick, short-term lump of finance, the loan amount to be agreed and the money transferred to the bank. More and more people are using this kind of loan as a solution to long-term money shortages instead of their intended purpose of temporary fixes. This is not the best way to go about paying bills and certainly not the best way to pay for luxury items, but they have filled a gap for many people. The problem is that many of the customers for these loans are already experiencing money problems before they take a short-term and high cost solution.
Who Decides the Line?
Like all things in life, there are limits. There are limits to the amount we can borrow, pay back and obviously there are limits to our spending power and this is the most important thing to realise before it is too late. The vast majority of people have been sensible in this period of, so called, austerity. The term austerity can mean stern or severe, but it also means a lack of luxury or adornments. The problem is that many people have struggled when they realise this means they can no longer wear designer labels, drink premium brands at the bar or in some extreme cases, live with heat and food at the same time. Those people are most at risk from the problems with payday loans, but only the person who is in the situation can tell anyone or decide if they can or cannot afford to repay a loan.
Shifting Blame
If there are sudden and unexpected expenses, a payday loan is perfect, but many people who borrow frivolously, fail to accept any blame when they have mountains of debt to overcome. Of course, this is not always the case, but we often hear about irresponsible lending being a problem or to blame for people in money trouble, but there should be more emphasis put on responsible borrowing. If people sat down and thought seriously each time the decided to take out another payday loan, the number of people who fail to repay their debts would fall like lead balloon.
The Big Picture
The problem is that many people have an incorrect negative view of payday lenders, of which, a great deal stems from mob mentality. A little bad press and people like to jump on the bandwagon, but those are the same people who need a payday lender when their boiler breaks down in the middle of winter. How else can they pay a plumber? If your car breaks down and you need to get to work for the week, you may have a full tank of petrol, but that is no good if you need to catch a train. A fifty-pound loan may cover your unexpected expense and you would be eternally grateful for that, so why are payday lenders derided on such a regular basis? It has to be something to do with a mixture of both borrower and lender.
Painting a Fair Picture
There is no point in dressing the industry up too much because there have been cases where lenders are less than perfect. That is why we have the Financial Services Authority (FSA) on hand to regulate the industry in the UK. They have taken action against lenders in the past and this has resulted in some losing their license or having their license suspended. This sends a message to other lenders to learn from the mistakes, although most lenders are well versed on the FSA guidelines and act accordingly or self-regulate to a higher than necessary standard.
Making the Right Choice
Living in the UK gives us certain freedoms and with freedom comes responsibility. We cannot complain about a nanny state telling us things how much is safe to drink before we drive, if we continually show a lack of common sense and the ability to act as a responsible adult. Like all things in life, we need to make up our own minds and live with the consequences. If that means managing our finances properly then you should think about cutting back before spending on something you cannot really afford.
