We are now considered a society living on borrowed money. Non-standard lending is becoming a more common issue, as people try to get hold of cash quickly for one off items that they need, such as the holiday of a lifetime, a house extension or a new car.
However, a report by market research agency YouGov has discovered that one in three users of non-standard loans needed the money just to make ends meet, and that this is an issue many of us are struggling with everyday.
We suggest that before you are tempted to borrow money that you seek advice from an official expert online and moneyadviceservice.org.uk is a good place to start.
We all know that there are a multitude of dangers that come hand in hand with borrowing cash, but sometimes it can feel like there is no other option when times are tight and the money is needed urgently. It might be needed to pay day-to-day bills, to buy something expensive but necessary such as a car or a new washing machine or to start up a new business venture.
Whatever the reason, it is important that you take everything into consideration before you sign the contract and always do your research beforehand. The main issue to consider is once you take that loan out can you afford to pay it back in time, before you begin accruing a mind blowing amount of interest?
If an individual is unable to pay a loan back in time and has used a non-standard lender, they may need to borrow money again just to cover themselves. This then creates a terrifying circle of debt, which can be hard to escape from. Your credit can also be affected if you struggle to make repayments, which can greatly affect your ability to rent a house and take out any future loans or mortgages, finance on a car and even mobile phone or internet package deals.
The amount of money borrowed is another important factor to consider, loan companies can tempt you with amazing offers on amounts of money, that are much higher than what you actually need. Only take out the exact amount you require, you can easily find yourself in hot water if you take out more than you can pay back.
You might consider borrowing money from a friend or family member to skip any legal implications and interest, however this can put a strain on your relationship with the person you are borrowing money from, so be sure that the lender understands you might take a little longer to pay them back and that they themselves won’t need the money in the near future.
The issue of money and people finding themselves burdened with crippling debt is now such an issue that schools are teaching pupils the dangers of loan sharks and borrowing money, as a recent BBC News business report found.
The fact that we now have to teach children the dangers from such a young age says a lot, but if they are aware of the dangers they should be able to avoid making the same mistakes.
Research and common sense are the driving forces required when you consider borrowing money.
If you know what legal implications and interest your loan entails, as well as how quickly you need to find the money to pay it back, then you can easily avoid falling into the danger zone.
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