The difficult credit conditions in the UK over the recent months have made things extremely difficult for people on lower incomes. Many with a below average income and who need to raise finance quickly, are taking desperate measures by using very expensive forms of credit, including uk loan sharks.
Factors which have affected UK household budgets during these tough times, include the rising cost of living, soaring energy bills, hiked up food and petrol prices, rocketing inflation and the knock-on effects of the global credit crunch amongst other things.
The only sensible advice for those even considering loan sharks, is simply do not bother! Loan sharks in the uk are unlicensed lenders who not only charge high interest rates, but also use intimidation and threats of violence to force people to pay much more money than they have actually borrowed. All licensed money lenders in the UK are regulated by the Office of Fair Trading (OFT).
Loans sharks in the UK must be avoided at all costs, because:
1. You may get a loan with bad interest rates
2. You may pay extortionate interest rate (sometimes as high as 100’s of per cent APR)
3. You may face harassment, threats or actual bodily violence if repayments are missed
4. You may even be pressured into borrowing more loans from them to repay one debt with another
5. You will receive little or no paperwork
6. They act outside of UK law as they are not licensed
7. It’s likely that your money is being laundered and also used to fund organised crime in the UK and beyond.
What about the alternatives?
Credit unions were seen as one of the options open to families on lower incomes, and to help them to avoid the risk of being taken in by uk loan sharks. Some may see Credit unions as the modern day equivalent of 18th century ‘town banks’, who provided local alternatives to national high street banks.
But, government officials have already admitted that an overhaul of credit unions is much needed in order to make them more accessible to the public at large.
For credit unions to grow further, they need to be seen as a real alternative to finance companies across the UK, and not just follow the old fashioned stereotype. To achieve this means they must remove barriers and enable them to offer a far greater range of services to a wider range of people.
Whilst these credit unions may help people to avoid the pitfalls of uk loan sharks, they still have some work to do help more people on a lower income, so that they can benefit from affordable loans.