Along many UK high streets these days there are shop units where you can borrow money. They promise all sorts of things, with loans being sorted out quickly, no collateral needed and things like that. They can be alternative for people who cannot borrow money through a bank or other financial institution, perhaps because they have already borrowed as much as they are entitled or because they have a poor credit record. However, there are many reasons why places like this should be avoided.
These lenders tend to be very expensive for a number of reasons. Firstly they are renting expensive high street shop units which they need to pay for. Although big banks do this, they have far more customers so can spread the cost much more easily. The lenders also are happy to lend to many people that banks will not. This means that they are taking on a lot more risk. They will therefore charge all of their customers more money, just in case they cannot afford to repay their debt. The cost to the customer can be considerable.
There have been people that have been specifically targeted by the staff in these shops as they walk by. They try to convince you that you need money from them, when you had not even considered this before. Sometime sit can be very hard to get away from a good sales person. It could be wise to avoid going near the shop, just in case this happens to you. If you find it hard to say ‘no’ and are tempted by having some extra money but do not need a loan then avoid them.
Keeps them in business
The more people that use these types of business, the more they can survive on your high street. Then more and more people will be tempted to pay more than necessary to borrow money. It allows people to think that they might like some money and they could be tempted to borrow it when they do not need it that much and they cannot afford to repay it.
It can be really easy to word things so that it sounds like you are getting a really good deal, when you are not. With the right advertising and well trained sales staff, they could convince many people that they can give them money and they will easily be able to pay it back. Most people who use these types of shops cannot afford to borrow money as the repayments are so expensive and having the extra money will cause more problems than it solves. By targeting those that cannot get money elsewhere they take advantage of those who are already struggling. If a person cannot borrow anywhere else, it shows that they have money problems and so it is best that they do not borrow money and get into more trouble. These lenders do not care about this but just want to make as much profit as they can and do mind who from.