With more financial restrictions placed on their budgets, Brits are being forced to take action against financial difficulties – but just how are they coping with tighter budgets?
Alongside the rising costs of essential items, consumers have also had to deal with soaring bills, pay freezes and job losses – all factors which have contributed to the poor economic climate.
How has this affected Brits?
According to the R3 Personal Debt Snapshot, 60% of people are concerned about their current level of debt and around 45% find it hard to survive between paydays. As a result, many people are looking for short term loans to get their finances on track and cope with stricter budgets.
The survey tarnished credit cards as one of the main factors that have caused consumers to experience financial difficulties and could explain why many people now favour loans. Participants of the survey stated they felt credit cards encouraged them to spend money on items that were not essential, such as clothes, presents and electronic items.
Using credit cards for these purchases may seem easy at first glance but small costs can add up quickly, leaving consumers to face large bills at the end of the month. Given the current situation concerning personal debt and attitudes toward credit cards, it is no surprise that consumers are turning to loans in cash when seeking additional funds.
Access to quick cash is a priority for many borrowers and getting a cash advance is often more convenient, making them highly attractive.
Nowadays, some lenders even collect repayments in person to make the process easier to manage, thus helping Brits to cope with tighter budgets.
How have other forms of lending been affected?
As they are claimed to encourage consumers to enter into higher levels of debt, credit cards are now being abandoned by many consumers. The commitment which they require, the chance of developing a spending habit and the fees incurred for late payments are all factors deterring people from using this form of lending and promoting the use of loans.
Whilst consumers can apply for more than one loan, the process is not as automatic as that of credit cards – helping to ensure people only borrow money when it’s necessary. Applications can also be processed online in a number of cases, making it simple for individuals to research the range of rates offered and to apply for their chosen loan.
The repayment schedule can also differ from that of a credit card, depending on the lender. Some loans accept multiple repayments in smaller amounts but these are only for the duration of the loan, unlike credit cards which can continue month after month.
This can make the repayment process more manageable for consumers who are already struggling with mounting costs.
This is a great way for people across the country to cope with tighter budgets, allowing them to spread even small amounts of borrowed cash across multiple repayment dates.