Quick Cash loans on the up in the UK
October 11th, 2008UK consumers who find themselves in a financial pinch are applying for quick cash loans to ease the pressure until payday.
Estimates show that quick cash loans have more than doubled since the beginning of the credit crunch in August 2007. Payday cash loans have skyrocketed some 130 per cent in 10 months, according to Moneymarket.com and quick cash lenders are springing up online in droves.
Unforeseeable expenses force people to take out quick cash loans in the UK
Quick cash loans are on the rise as more people find themselves facing unforeseen financial problems unlike never before. Cash loans of this type are commonly repaid within a few week, they provide borrowers just enough breathing room until payday and are generally a convenient source of immediate cash. Most UK consumers that borrow from quick cash loan agents use the money to settle last minute debts or to help them through a sudden financial emergency.
The majority of borrows take out quick cash loans to pay for utilities or last minute home repairs. “Quick cash loans have always helped me more than hurt.” Says David Scott of Manchester, a frequent customer of a popular online cash loan service. “I use the cash for emergencies mostly, although it seems I have an emergency every other week.”
APR and quick cash loans
The typical APR (annual percentage rate) charged by the average UK quick cash lender is 1,355 per cent – however, APR rates are not necessarily relevant to short term cash loans since they are commonly paid within 30 days or less. Although quick cash lenders concede that their services are certainly not the cheapest loans, they are the least invasive, most convenient and the fastest solution to an unexpected financial crisis. UK Payday loans, as with U.S. payday loans, are intended to help people who are struggling to make ends meet. Whether one has bad credit, no credit or simply has no other solution, a quick cash, short term loan is often the only option and the APR is truly irrelevant.
Quick cash loans and additional finance charges
Generally, the interest rate of quick cash loans will be clarified and agreed upon by both the lender and the borrower well in advance. However, many UK consumers have reported extending a quick cash, short term loan or taking out a second cash loan from yet another payday lender to pay back the first, and so on. This leads to additional finance charges and debts can snowball out of control if the loan isn’t repaid on time. “We always encourage our customers to settle their quick cash loans promptly.” says one leading UK cash loan agent. “It’s always best for both the consumer and for the UK lender if the money is repaid, in full and on time. When taking out quick cash loans, it is vital for consumers to view it as a last resort solution, rather than an ongoing habitual practice.”
There is no denying that if a person cannot payback a small cash loan on time, it will end up exacerbating ones financial problems and thus lead to more debt. Cases such as these are rare and uncommon since most small cash borrowers are responsible, hard working UK citizens, eager to overcome a financial crunch and capable of settling their small debts without problems.
