Pawnbrokers are just one category of alternative lenders benefiting from the financial shortcomings of many UK consumers. Droves of people are taking short-term loans from pawnbrokers to cover living expenses.

Cash Converters, a high street pawnbroker, recently reported that its UK personal loan book nearly quadrupled from 2010 to 2011. Customers are exchanging jewelry and diamonds for instant cash or taking out a smaller personal loan.

For the 12 months through December 2011, the value of UK personal loans held by Cash Converters skyrocketed from £2.3 to £8.5 million. The company operates 208 stores in Britain alone where consumers can exchange valuable jewelry and gems for up to £10,000 in financing per contract.

In October, the company introduced an online personal loan application for consumers who need between £500 and £2,000 in cash over the short-term. Repayment schedule for this financing ranges from four to seven months.

According to the company, 96 percent of people applying for these payday loans online were new customers. Though the loans APR is much higher than rates offered by traditional high street banks, the financing is more convenient for consumers and available to those who have poor credit.

Most borrowers make repayments monthly via a direct debit from their designated bank account. Those who need an immediate cash advance of £10 to £600 can visit a Cash Converters store and arrange a weekly, fortnightly, or monthly repayment schedule.

To qualify for the longer-term no credit check loans, consumers must be older than 18 and are required to provide three identifying documents, one with a signature and another verifying address.

The N.I. Number, last three pay slips, a valid debit card, and bank statements for the last 90 days are also required. For cash advances, the age, debit card, and document requirements apply and bank statements from the previous 60 days are required.

Cash Converters is just one of a growing number of payday lenders operating in the UK. Payday loans have become very popular with Brits in particular since the financial crisis. However, not all have used them successfully, which has landed them in deeper debt.

During the last six months of 2011, the number of Cash Converters customers failing to repay a loan increased by over one-fifth and the company reported bad debts of 11 percent of total lending.

The additional risk involved in lending to bad credit consumers is the main reason for the higher loans APR. Cash Converters and other providers of payday financing are tightening their lending criteria to reduce their bad debts. In addition to checking whether consumers have outstanding payday loans, lenders are hiring collections staff to recoup their money.

It could not be easier to apply for no credit check loans, which leads many Brits to view this as a first resort. These loans are effective at filling an immediate and short-term need for cash.

However, they should be used sparingly and repaid as quickly as possible to limit interest charges. Until the UK economy improves, lenders like Cash Converters should continue to be successful.

In a very unfortunate development, one in five UK mothers is reportedly skipping meals so her children do not go hungry. Netmums discovered this in its recent study, which indicates that as many as 70 percent of UK families are facing a financial crisis.

A decrease in income or additional price increases for basic items could push these families over the edge into financial ruin. It is a sad state of affairs and something that must be addressed immediately.

The parenting website studied 2,000 UK mothers and found that one-quarter of their families survive by using credit cards. An eye-popping one in 20 uses payday loans regularly just to cover living expenses. Nearly one-half of the families polled admitted to selling or pawning belongings to get money for daily needs.

One in 100 copped to dealing with a loan shark just to remain afloat during these difficult economic times.

The desperate financial situation that many families are facing takes its toll in many ways. Fifteen percent of those studied claimed to be “desperate” due to the debts they had accumulated. In addition to falling into debt, one in six parents participating in the survey was under treatment for a stress-related illness with financial causes.

Three percent of parents surveyed felt that they could not cope with the pressure and claimed they were “suicidal.” They saw no way to improve their finances, despite the many borrowing options and ways to consolidate their debt.

According to this study, nearly two-thirds of UK families are bringing in less net income than they did this time last year. The majority of those polled, 61 percent, said they were short on cash each week. Two in five claimed to need only an extra £20 each week to make ends meet.

One-third need £50 per week and one in ten need £100 more each week.

In the scheme of things, this is not an outrageous amount of money and payday loans are able to cover this shortfall. However, without additional income to make up for the shortage week after week, consumers dig themselves into debt because they cannot repay the loans.

They roll the balance from one term to the next, increasing the amount of interest and fees they owe. This repeated borrowing is enough to put any family into dire straits.

One mother informed Netmums that if it came down to being able to feed either her children or herself, she would feed the children. Sally Russell, founder of the parenting website, said it was “shocking” that seven in ten UK families are living on the financial edge.

She commented that mothers should not be sacrificing meals just to feed their children.

Ms. Russell also stated that mothers should not be resorting to loan sharks in this day and age. Though no credit check loans from reputable lenders offer a short-term financial solution, these should only be used in emergencies. Otherwise, the likely result is a never-ending cycle of using borrowed money to cover living expenses.

In what some would call an ironic twist, staff from payday lender Dollar Financial UK are providing money management advice to children. Payday lenders are known for charging extremely high loans APR. While some consumers find this financing beneficial, others wind up with huge loans debt because they are unable to repay the principal, interest, and other fees.

Therefore, it seems strange that their children would be learning about these no credit check loans.

Dollar Financial UK staff are conducting hourly educational sessions for students ages 12 to 16. During the seminars, children learn about budgeting, risk, and financial planning. Some campaigners are furious, saying that school children should not be exposed to the company, which owns high street lender The Money Shop.

According to Labor MP Stella Creasy, who is seeking regulation of payday financing, these lenders are now receiving assistance in their quest to appear socially responsible. However, this lender in particular charges a 260 percent loans APR for a 30-day loan.

She does not feel that such companies should be part of the UK educational system until the cost of this credit is capped through regulation.

Ms. Creasy noted that many parents of UK schoolchildren share her concern. Young Enterprise, the program organizer, provided assurance that the Money Shop staff was not permitted to promote the business to the children.

Catherine Marchant, chief executive of Money Shop, clarified that a Young Enterprise manager actually teaches the courses, while Money Shop staff merely help students develop a set booklet.

Protests have already been staged outside some Money Shop stores in response to the program. Young Enterprise revealed that it was paid £15,000 by Dollar Financial UK for the sessions.

On Tuesday night, it cancelled a session scheduled in Medway, Kent, due to fears that the protests would move to the local schools.

Payday loans have become very popular with UK consumers who are strapped for cash. While private individuals are not shy about using this financing, more business owners are choosing to tap into their personal savings account for business financing.

This trend is concerning because it could leave entrepreneurs without any money for retirement or, even worse, insolvent. Taking a loan during these golden years may not be possible, leaving these individuals with few options.

Research conducted by Bibby Financial Resources revealed that compared to this time last year, more business owners are keeping operations afloat with personal savings. In fact, this has become the number one way to raise needed funds for UK small and medium-sized enterprises (SMEs).

Just four percent of the companies surveyed reported applying for funding through government initiatives. This seems surprising, given that Santander and HSBC recently reported meeting 2011 Project Merlin lending objectives.

Two-thirds of the entrepreneurs surveyed reported that they had not applied for any external funding during the past 12 months. This is a year-over-year increase of 11 percent. During fourth quarter 2011, banks decreased their SME financing due to the higher cost of commercial lending, according to the most recent Trend in Lending survey by the Bank of England.

Despite this, Bibby Executive Director Edward Winterton reported that lack of awareness regarding options is the largest barrier to SMEs when it comes to accessing financing.

While Mr. Winterton sees the need for education of UK business owners regarding funding options and how to access them, he also recognizes that government agencies must understand some of these alternatives. For growth-related SME funding, invoice financing can be appropriate.

Government agencies should know how it works and begin offering it as a commercial financing solution.

Invoice financing bridges the gap in cash flow between issuing invoices and receiving payment. A business receives an immediate injection of cash and an ongoing working capital flow against the value of its outstanding customer invoices. In addition, the provider manages the credit function, collecting invoice payments.

With no more need to perform collection duties themselves, workers have more time to focus on their primary duties.

Mr. Winterton stated that personal savings is not designed to fund business growth and does not represent a sustainable solution. If business owners continue to use it, more could find themselves insolvent in the near future. In addition to invoice financing, businesses should review the loans bank offered to determine if any meet their needs.

When short-term cash is needed in an emergency, no credit check loans are one solution. Applications are often approved on the spot and money is transferred into the bank account within an hour.

Whether they are just starting out or have an established business, entrepreneurs should be prepared for the worst from a financial perspective. Even if they do not need a loan today, they should know what financing is available.

When cash flow becomes an issue, there may not be enough time to research the options and decide which one is best.

Payday loans have been recommended for many purposes, emergency car repair expenses and medical bills being two of them. But, who would have thought that lenders would recommend them for plastic surgery?

The Daily Mail recently reported that providers of these no credit check loans are marketing services to UK consumers considering plastic surgery.

One UK lending site goes so far as claiming that defects in the appearance can be an obstacle to self-confidence. It recommends its so-called cheap loans to pay for plastic surgery. The website features beautiful women dressed in expensive clothing carrying armfuls of shopping bags.

This lender is playing on the desire that many women have to look more attractive.

While using payday loans to cover emergency expenses is sometimes necessary, using them to pay for a tummy tuck or breast implants is not. If people cannot afford regular living expenses, the last thing they should be doing is considering expensive plastic surgery.

They should focus on covering their bills and use this financing only when necessary.

The loans APR is something that should be considered when deciding to use payday financing. It can be hundreds or thousands of percent. Not a huge deal if the loan is repaid quickly but when used for plastic surgery, that may be impossible.

Surgery bills are usually thousands of dollars, making it necessary to take more than one loan.

If this money is not repaid during the initial term, interest and fees increase.

Anyone who is unable to afford plastic surgery should probably not be considering it. The British Association of Aesthetic Plastic Surgeons President-Elect, Rajiv Grover, agrees. He told the Daily Mail that people should wait to have the procedure performed if they need a loan for it.

While saving the money, consumers can determine whether this surgery is something they really need.

When it comes to loans, bank offerings are few and far between. Only UK consumers with good credit are approved and just a small number of them qualify for the lowest loans APR. Everyone else is either rejected or saddled with a very high APR.

This is driving consumers toward no credit check loans that are easier to obtain and provide money much quicker. Consumers are forced to forgo cheap loans from banks for more expensive payday loans. At the same time, they have their pick of current accounts.

Banks are engaged in stiff competition for current account customers, involving UK consumers in a tug of war. High street providers strive to attract consumers to take current accounts because most UK residents approach their own building society or bank first when they need new financial products like loans, credit cards, and mortgages.

Consumers are notoriously hesitant to switch the account they use to make regular deposits and take withdrawals.

To lure consumers their way, financial institutions are offering some incentives. According to Moneyfacts, the number of banks providing “switcher incentives” has increased during the past few weeks. Santander, Halifax, and HSBC are three of the high street providers offering these to new customers.

Incentives include interest-free overdrafts and cash payments designed to make switching current accounts more attractive.

Beginning in 2013, it will be even easier to switch bank accounts because new regulations will reduce waiting times. Though they may not be able to secure the loans cheapest available, UK consumers may receive some great benefits for changing their current account.

The lending environment may even change by then, making it easier for consumers to get a loan from their new bank.

Current accounts are the most common personal financial products that UK consumers use. Therefore, many consumers were more than willing to weigh in on the recent Consumer Moneyfacts Survey. More than 60,000 people responded, making this the largest poll of its kind.

They named Barclays the best current account provider due to its wide range of offerings. With the debate regarding current account charging raging on, Barclays managed to edge out the competition with its low rates, assortment of benefits, and outstanding customer service.

Consumers make the switch to Barclays due to products like the Barclays Bank account, which features no monthly fee and includes a Barclays Visa debit card. Telephone, mobile, and online banking is available and this account has an overdraft feature.

Once they have their new account, they can explore the bank’s personal loan options and compare these with shorter-term financing offered elsewhere to find the loans cheapest for their needs.

Whether they choose loans bank offered or provided by a payday or other short-term lender, consumers can find a good deal. A Barclays customer registered for online banking can receive personal loan funding from the bank within just three hours after acceptance of an online application.

Barclays even offers a price guarantee, matching the rate of a cheaper loan and providing an additional £50.

The average worker in the UK spends half a month worrying about whether enough money is available. This recent discovery by Halifax bank has many experts concerned. Research from the bank indicates that workers typically run out of money just 17 days after being paid each month.

Of the over 2,000 adults surveyed, ten percent reported that the financial pinch began only a week after payday. By the final week of each month, more than half said they typically struggled to make ends meet.

Based on these statistics, it is no surprise that five percent of those surveyed claimed to check their bank account balance one or more times each day. Twenty-two percent said they checked the balance four or more times a week. An amazing forty percent have committed their bank balance, to the nearest £5, to memory.

Internet banking and mobile banking apps have made it easier for account holders to monitor account activity, said Halifax director of current accounts Anthony Warrington.

Mr. Warrington called the move by consumers to control bank balances “encouraging.” What is not so encouraging is the fact that those balances tend to be much smaller, due to the reduction in take-home pay. According to the Trades Union Congress, UK workers take home £60 billion less each year in real terms than they did 30 years ago.

Poor growth in earnings, a widening pay gap on the career ladder, and increased personal debt have eroded income.

Workers have become more productive but do not appear to be compensated for it. In 2000, the pay ratio between corporate executives and lower level workers was 47:1. By 2011, this ratio had more than doubled to 102:1. Workers who manage to make it to the upper echelon are rewarded but there are very few jobs compared to the lower ranks.

Though the average family in the UK decreased its debt by £355 during 2011, it is far from out of the woods. About £7,900 in credit card balances, overdrafts, and personal loans remains. For many UK families, payday loans represent a portion of this financing.

These loans are becoming the go-to financing for consumers unable to qualify for bank loans. No credit check loans provide small amounts of money designed to bridge the financial gap experienced between paydays.

With the recent news from Pricewaterhouse Coopers that UK families are some of the most indebted on the planet, many financial experts are focusing on the region. So are payday lenders, who are moving their establishments from dark alleys onto High Street, attracting busy professionals who need cash quickly.

Customers visit a payday lending establishment during their lunch hour and have the cash by the end of the day.

Bank of England Governor Sir Mervyn King astutely noted that UK workers are experiencing a “ferocious squeeze” when it comes to take-home pay. He revealed that the average private sector pay increase is 4.2 percent, which is below inflation.

This leads one to conclude that payday loans and other forms of borrowing will continue to be very popular.

UK consumers use money from payday loans to pay for car repairs and unexpected expenses. They even apply the cash to medical bills for themselves or another family member. If these loans are suitable for medical expenses for humans, there is no reason they cannot be used for veterinary bills for a beloved pet.

A new UK payday loan company has sprung up with just this purpose in mind. Pet owners can apply for a short-term loan with payday lender Petloan in order to pay unexpected vet bills.

Representative loans APR offered by Petloan is 2,120 percent. This may seem like an astonishing amount but keep in mind that the loan is designed to be repaid relatively quickly. Pet owners who cannot or do not want to pay vet bills with a credit card can take a loan of between £50 and £1,500.

The announcement of this new lender comes on the heels of the recent UK report predicting that payday loans may become more popular than credit cards.

Payday lenders have come under attack for their high loans APR, leading consumer groups and some politicians to request government regulation of the industry. Some believe that capping the cost of this short-term financing will protect the most vulnerable borrowers.

According to a recent study by PricewaterhouseCoopers, the limited amount and term of payday loans are appealing to consumers who are hesitant about borrowing during this uncertain economy.

Petloan claims to be the only UK short-term lender dedicated to pet owners. According to a spokesperson for this new payday lender, services are designed for people dealing with the expense of caring for pets. Managing Director Ash Sethi referred to the cost of pet insurance and unexpected bills as an “increasing burden.”

He noted that pet insurance companies are usually not quick to pay claims, leaving pet owners on the hook for the bills.

Mr. Sethi stated that his company provides pet owners with the ability to get the necessary care for their pets without being concerned about cash flow. He pointed out that the services are designed to improve management of cash flow, not push UK consumers further into debt.

As just one example, a pet owner can borrow £200 for a 30-day period, repaying £258 at the end of the term. This equates to an annual interest rate of 352.8 percent.

Just last month, popular payday short-term lender Wonga was called “predatory” after content on its website suggested that students use its financing for purposes like holidays. This is just one example of the scrutiny taking place within this industry. Wonga removed the information from its site and denied targeting students as prospective customers.

Petloan is not focusing on a traditionally vulnerable population but it does have a niche audience. Pet owners may find the financing useful for covering veterinary bills over the short-term. However, they should focus on repaying the loan as soon as possible to avoid additional interest charges and other fees.

Otherwise, a routine vet bill could grow into a major expense.

Recent research conducted by Vincent Bond & Co reveals that 28 percent of UK citizens in debt have taken payday loans. From 2006 to 2009, there was a four-time increase in the number of people using these short-term, no credit check loans.

During 2009, 1.2 million UK residents took a total of £1.2 billion in payday loans. Within the next six months, 3.5 million people are expected to become payday loan customers. For some consumers in deep debt, this type of loan seems like the only answer.

Individual Voluntary Arrangements (IVAs) and debt management plans were other popular methods used by UK residents to eliminate debt.

Even redundant individuals who quickly find a job may not earn enough to cover their living costs, causing debt to grow. An IVA can reduce debt by up to 75 percent and bankruptcy eliminates most, if not all, unsecured debt. However, bankruptcy should be a last resort because it has several negative results, advised Mr. Rees. It is difficult to get a bank account after declaring bankruptcy and a bankruptcy remains on the credit report for five or six years.

In terms of debt management plans, 44 percent of survey respondents found a paid debt consultant effective, while 32 percent used free debt management advice. Nearly one-quarter were able to manage their debt themselves. Mr. Rees commented that consulting with a free or paid debt counselor early on could help consumers get back on track financially.

He recommended shopping around for debt management companies to find one that follows a recognized code of conduct like that created by the Debt Managers Standards Association.

If UK consumers find themselves with unmanageable debt, taking steps to consolidate it may resolve the issue. Waiting too long to address the situation usually makes things worse. Taking out additional payday loans and using credit cards more frequently are not ways to handle debt.

Consumers must instead reduce expenses and begin repaying outstanding balances.

The Vincent Bond & Co statistics regarding payday loans may seem unbelievable to some people. They are unfortunate indicators of the financial status of UK residents. Though this financing can be useful in certain situations, consumers should never rely on it to cover their monthly bills.

If this happens, they may soon be worrying about more than their television service being cancelled.

It is never too early to begin developing good credit history. Parents may be hesitant to teenagers with a regular credit card, for fear the youths could put them into debt.

The Virgin Money pay monthly Visa is a great alternative. This prepaid credit card is available to UK residents age 13 or older and acceptance is guaranteed.

Prepaid cards are alternatives to credit cards for bad credit. They are topped up with cash and then used to make purchases up to the existing balance.

For parents who want to avoid the high interest rate of bad credit credit cards while teaching teens responsible spending habits, this is an excellent solution.

The Virgin Money prepaid card can even be used for online purchases, making it convenient for anyone who does not have a debit card or another credit card.

This card costs £9.95 and has a £4.75 monthly fee. There is no charge for topping up, which can be done by paying cash at a Post Office or using a debit card to pay online.

No transaction fee is imposed for purchases made within the UK but a £1.50 fee is charged for each UK-based cash withdrawal, discouraging teens from taking cash from the account.

Since this is a prepaid card, there is no interest charged on purchases and balance transfers are not permitted. A bank account is not required to obtain the card and a credit check is not conducted.

In addition to secure shopping in person, via telephone, and online, cardholders can find discounts at Virgin companies.

The Virgin Prepaid Visa features PIN and fraud protection, ensuring cardholder safety. Working teens can have wages paid directly on the card, to a maximum balance of £3,500.

Teenagers can check their spending by reviewing their account statements online and can eventually upgrade the card to another type.

Whether they had good or bad credit cards, UK consumers were not shy about using them in 2011. In its recent report, the Skipton Building Society revealed that last year, the average Brit used credit cards 267 times.

During 2011, the typical consumer spent over £17,000. It seems that even a sluggish economy has not prevented Brits from whipping out their plastic.

With such a high level of spending, one would guess that only big-ticket items were purchased. This is incorrect, as many Brits used their credit cards for living expenses.

The largest proportion was spent on food and fuel. Respondents spent £2,690 during 25 trips to the food market and £2,233 for 23 fuel tank refills. However, beverage purchases were also substantial, representing £492 total during 12 trips.

One-third of those surveyed admitted to using their good and bad credit credit cards more in 2011 than just one year before. Some went on holidays, adding £1,392 to their credit card bills.

Others enjoyed nights on the town at a total cost of £761. Still others hit the stores, spending £527 on shoes and over £874 on clothing.

Then there were the unexpected expenses like car repair bills, which represented £703 for the typical British consumer. Medical expenses included doctor and dentist visits and medicine, representing £418.

Even commuting expenses were substantial, adding £512 to the credit card bill of the average consumer.

Surveyed Brits with credit cards for bad credit and good began 2012 with a card balance of £2,271, on average. Close to half of them said they were not worried about the debt.

They may reconsider when they realize it will take nearly 25 years to repay this balance through minimum payments. With a 17 percent credit card interest rate, they will pay an additional £2,812 for this convenience.

The Financing and Leasing Association (FLA) announced an updated code of lending practices for payday loan companies.

However, consumer rights groups noted that these new rules will not likely provide increased protection to consumers during the short-term.

Critics feel that additional action must be taken to prevent UK consumers from getting themselves into more debt. Payday lenders would rather make changes voluntarily than face additional regulation.

Under the new code of practice, a payday loan may only be rolled over three times. Wonga is the only member of the FLA offering payday loans and Labor MP Stella Creasy does not think that limiting its rollovers will be helpful to consumers.

She points to America as an example of the result, where consumers repay a loan and immediately take another one. Ms. Creasy believes that a rollover limit will only work if a waiting period is imposed before a new loan can be taken.

The Labor MP is pushing for capping the total cost of these short-term, no credit check loans. A spokesperson for the Consumer Credit Counseling Service said the debt advice charity would like rollovers to be prohibited.

Money Shop owner Dollar Financial has agreed to this in Canada but still permits rollovers within the UK, the spokesperson reported.

Payday lenders have faced widespread criticism for practices including high loans APR and using debt collectors when a customer defaults.

The FLA wants its payday lender members to outline the cost of loans more clearly prior to application. It also wants lenders to reinforce the idea that payday loans are intended only for short-term borrowing.

FLA consumer finance head Fiona Hoyle said the three-rollover maximum that is part of its new practice code will only be permitted upon customer request and following a credit review.

This month, an industry review is expected to be announced by the Office of Fair Trading. According to Ms. Creasy, payday lenders are currently taking action to illustrate that additional regulation of their industry is not required.

Nearly three-quarters of the payday lending market is represented by the Consumer Finance Association (CFA), which is reportedly collaborating with other trade associations and the Department for Business Innovation and Skills to develop an “enhanced code.” This framework is anticipated to go into effect later this year.

CFA chief executive John Lamidey believes that a rollover cap on payday loans could negatively affect customers. When borrowers reach their rollover limit, they may look for credit elsewhere.

Mr. Lamidey commented that while the FLA code was comprehensive, it regulates just one lender. The code released by the CFA will pertain to many of the largest UK payday lenders, affecting more consumers.

Dan McDonald, the Medway Citizens Advice Bureau chief executive, thinks that emergencies are the only reasons to use payday loans.

He does not believe this type of no credit check payday loan financing should ever be rolled over and placing a limit on rollovers will not make any positive difference.

In his words, “it just means people can be taken advantage of three times instead of six or seven.”

They may not be the loans cheapest to get but payday loans are proving very popular with females in the UK. Lenders promising instant cash and charging interest rates of up to 16,000 percent are attracting women in droves.

One UK female is expected to take a payday loan every 15 seconds during the next six months. In response, more payday lenders are popping up all over the country, offering easy ways for women to get cash.

Oakam is just one of the smart-looking payday lenders on High Street. As the rules for loans bank offered become more restrictive, UK women are visiting such establishments to secure expensive debt.

The payday lending industry in the UK has an estimated worth of £2 billion and is spending millions to attract female professionals who need cash quickly.

Marketing campaigns are designed with women in mind, such as the estimated £9 million worth of television advertising spend by Wonga in 2011, which included a spot during the finale of The X Factor TV show.

Female customers report that getting a payday loan is fast and easy, especially when applying online, Lenders like Quickquid supply cash within minutes of receiving an application.

Women use the money to cover rent, utility bills, or other expenses, hoping to repay the loan with their next paycheck. Those that are unable to often find themselves in more debt than they bargained for and on the receiving end of lender calls and emails.

Women are featured in advertising campaigns used by some of these lenders. Payday lending establishments are relocating from bad sections of town to High Street.

The lender Oakham even sponsored a beauty pageant, where it distributed information regarding its 300 percent Bonus Loan. The company claims it was not trying to target young females but attempting to increase visibility with the local community.

Some lender websites convey the message that a payday loan provides money to fit one’s lifestyle. This financing is promoted for purposes other than emergencies, such as buying new clothing.

Low requirements regarding income and bank account balances make these loans even more attractive. The financing seems reasonably priced over the short-term. The problems come into play when the loan cannot be repaid during the initial period.

Borrowing £100 from lender Peachy carries a 16,000 percent interest rate. After ten days, the amount due is £115, which is not so bad.

However, the late charges start at £10 after just one day and increase from there. Repaying this loan one month late will more than double the amount owed.

However, this does not seem to be deterring women in the UK. Ferratum reports that nearly two out of three British customers are women, most between age 18 and 35.

Industry trade group R3 anticipates that 500,000 females in the UK will take out a payday loan within the next six months. This figure is 25 percent higher than the estimated number of UK men.

Politicians like Labor MP Stella Creasy believe that payday lenders are targeting “financially vulnerable” young women through their snazzy websites and television advertising.

Speedeloans is an award-winning UK payday lender that offers one of the lowest loans APR in the industry. It offers instant lending decisions and funds loans within two hours for borrowers who need money quickly.

The CEO of this reputable lender recently voiced his support for governmental capping of payday loan costs. This move is commendable, since industry regulation will directly impact profits for his company.

In a statement released on Friday, Speedeloans CEO Gary Miller-Cheevers noted the need for a “well run and tightly regulated” market for short-term financing.

He said his company supports politicians interested in protecting UK citizens from “unscrupulous lenders.” MP Stella Creasy is one of those politicians.

Her highly visible campaign is pushing for interest rate caps on products like payday loans. She wants to stop establishments she refers to as “legal loan sharks.”

Last week, Scottish National Party MP Alyn Smith blasted British Prime Minister David Cameron regarding the proliferation of disreputable payday lenders.

Mr. Smith said that the Prime Minister and “his cronies must get their act together.” Otherwise, he fears that more UK citizens will find themselves in a financial nightmare after using payday loans.

In Mr. Smith’s opinion, unscrupulous payday lending companies must be regulated out of existence.

Mr. Miller-Cheevers suggested that expressing loan costs in GBP terms instead of loans APR would help customers compare short-term financing costs more easily.

He believes that APR and the EAR typically quoted for a bank account overdraft can be both confusing and misleading to customers.

The EAR represents the actual annual interest rate but does not include account charges and fees, while APR does. With the two terms not including equivalent items, it is difficult to accurately compare different types of short-term borrowing.

The Speedeloans CEO also suggested that transparency in all forms of borrowing might deserve a second look. He noted that his company aims to provide transparent service to its customers, ensuring that each one is aware of payday loan costs before committing to this financing.

Mr. Miller-Cheevers also revealed that his company recently began scrutinizing customer financial situations in more detail. It now rejects customers with high debt levels and those who have taken multiple payday loans from questionable lenders.

The average payday loan from Speedeloans is GBP250 and features a 19-day term, costing slightly more than GBP50 in interest, fees, and other charges.

Taking an unauthorized overdraft from the Bank of Scotland-Halifax costs GBP5 daily. For a GBP250 overdraft for 19 days, this would equate to an unauthorized overdraft charge of GBP95 and a GBP10 charge for a bounced item. These charges and fees are twice those imposed by Speedeloans.

With the support of at least one provider of payday loans, the government should feel more comfortable moving forward with industry regulation.

Payday loans are designed as a cost-effective solution to emergency needs for short-term loans and when used responsibly, they are very helpful.

Disreputable payday lenders profit from the financial misfortunes of UK consumers and it is agreed that this must stop.

UK families have increased their average amount of debt by nearly 50 percent in just one year, according to recent research from the insurance company Aviva. As of early January 2012, the average family in the UK had £7,944 in financing, including credit card and personal loans debt.

In January 2011, this figure stood at £5,360, a substantial amount but much less than the most recent figure, which equates to just shy of one-third of typical annual income.

Experts worry that this trend may indicate future problems as pressure on finances increases. Families with unsecured debt are relying most on credit cards, owing £2,314 on average.

The typical UK family has a personal loan balance of £1,739. Aviva protection sales and marketing head Louise Colley pointed out that although average income has increased during the past 12 months, so have prices for needed goods and services, leaving families struggling.

Both childless couples and those with children were subjects of the Aviva survey. Couples who were planning to start their family had the highest debt levels, over £15,000 on average. Being in this financial predicament has made it difficult for families to save money.

Despite a seven percent increase in average net income during the period studied, average savings declined from £22 to £21 per month. Forty percent of families surveyed last year reported they were not saving any money each month. This figure increased to 42 percent by early January 2012.

This may be bad news for UK families but it is good news for providers of payday loans. This financing is playing a critical role with UK consumers trying to make it through difficult financial times. R3, the Association of Business Recovery Professionals, released the results of its latest survey regarding financial habits of Brits.

Some of the questions focused on payday lending, offering the first comprehensive look at this industry in Britain.

Of the 2,000 British adults surveyed in October 2011, seven percent- 3.5 million people- planned to use a payday loan within the next six months. According to 60 percent, a payday loan made balancing the monthly budget an easier task. Interestingly enough, 39 percent noted credit card debt as the largest reason they could not repay their bills.

Sixty-eight percent of Brits who used payday lending reported repaying the balance on time.

Seventy percent of previous payday loan customers said that they did not have access to credit elsewhere. Though they applied for different loans, bank and credit union rejections left them with no other option.

Payday financing was used by 52 percent of respondents because it was easier to obtain than other types of credit. These no credit check loans feature quick approval and funding.

Some experts believe that this survey actually understates payday loan customer satisfaction levels. UK Consumer Finance Association (CFA) head John Lamidey reported that CFA and independent research revealed a 94 percent satisfaction rate.

Though a payday loans APR is higher than rates for conventional loans, the availability and convenience of getting this short-term financing are proving very attractive.

When consumers in the UK are unable to secure loans bank provided, they turn to payday loans and other alternative sources of financing. But, what about businesses? Commercial lending restrictions are just as tight and many companies need financed capital to help them through these difficult economic times.

Payday loans are often not enough to keep a business afloat. Fortunately, small and medium sized businesses have other options designed especially for them.

Asset-based lending, invoice finance, business loans, and trade finance are several types of alternative funding for businesses. Some websites are popping up to help business owners find this financing. The service is free to both businesses and lenders, making the arrangement financially attractive for both parties.

Having access to free independent advice regarding commercial financing makes it easier for business owners to find the best loan.

RSM Tenon is one company that began offering this service in response to a need it identified. Company representative Carl Jackson noted that a traditional overdraft is usually not sufficient for a growing small company. The alternatives provide companies with higher funding levels, increased flexibility, and most importantly, a reduced level of personal risk.

Companies can explore their options and select a financing arrangement that is most suitable for their present needs.

Research reveals that almost 42,000 UK-based businesses utilize invoice financing. With this arrangement, the business owner gets fast, cheap loans based on outstanding invoices. Financing companies offer immediate funds against these invoices, eliminating the need for the business to wait 30 or more days to be paid through invoicing.

This type of funding is useful for both companies with cash flow problems and those that are growing quickly. In recent years, more businesses have used invoice finance.

Asset based lending is another type of funding that has recently increased in popularity. This involves a company borrowing against invoices and other business assets like machinery, property, structures, and stock. Mr. Jackson reported that the industry has changed its opinion of such funding models.

These were once considered only as a last resort. Now that it has become difficult to find commercial funding and business owners are starting to understand that this alternative financing features competitive terms and flexibility, more are turning to these products.

This type of financing cannot resolve every funding issue, but few solutions can in themselves. However, business owners should be aware of these options because these may be the loans cheapest to them. Knowing what all their alternatives are allows entrepreneurs to make the most informed decisions, whether they are trying to consolidate debt, improve cash flow, or grow the company.

In recent years, more people have been using no  credit check payday loans to meet their financial needs. When repaid according to terms, that financing can be very useful. Now, businesses have their own options for alternative funding. These are usually easier to get than loans bank offered and feature convenient repayment terms.

If the current financial climate continues, more business owners may begin taking advantage of asset-based lending, invoice finance, and similar financing options.

Before Christmas, there were reports that many UK residents were using payday loans to fund holiday spending. A post-holiday study by lender Speedeloans revealed that three times more people used these no credit check loans during the 2011 holiday period than during the 2010 season.

Despite what seems like an alarming increase in the number of loans, this lender reported that its holiday customers had one-third less debt than during 2010.

Shelter Scotland commissioned YouGov to conduct a survey in early January. The results showed that 936,000 UK citizens had used a payday loan during the previous 12 months. According to personal debt expert James Falla, several factors caused the higher number of loans, including more pre-holiday television advertisements.

This fast cash was used by many people to fund holiday gift giving and entertainment.

Though the holidays are over, Brits are continuing to use this financing. New research indicates that more of them are using the cash to pay daily expenses. Consumer Finance Association Chief Executive John Lamidey commented that it was “simply impossible” to use a short-term loan like this to pay the mortgage.

Since the loan term is usually no longer than a month, it is not feasible to use for mortgage or rent payments. Consumers who find themselves in arrears with their mortgage or rent should avoid this financing and instead seek advice from a debt agency.

Irvine MSP Margaret Burgess is one of the politicians that consider the loan trends worrying. She recently demanded that the UK government take action against payday lenders immediately due to their high interest rates.

Ms. Burgess is a former manager of the Citizens Advice Bureau and recently led a Scottish Parliament debate regarding her motion on damage inflicted upon local residents by payday lenders.

Previously, Ms. Burgess had received bi-partisan support for this motion. In her presentation to Scottish Parliament members, she said that many UK consumers view a payday loan as “an easy way to access money.”

The borrower authorizes the lender to automatically withdraw the loan principal plus interest on the next payday. When consumers are unable to repay the loan in full, it rolls over, increasing the interest and other costs. Many people find themselves taking an additional loan to repay the first one, digging themselves into debt.

Ms. Burgess said that payday lenders target vulnerable citizens earning low wages. She characterized this as “usury and exploitation.” She is calling for immediate regulation of the industry to protect citizens from high loans APR and debt they cannot manage.

At the same time, she is requesting that citizens have access to affordable credit and reputable advice regarding money management.

The Irvine MSP believes that local credit unions exhibit these qualities. She provided the 1^st Alliance Credit Union as an example, saying that the institution encourages members to save and includes emergency loans and low-cost credit in its offerings.

It also collaborates with local money advice agencies and authorities regarding mortgage and rent arrears. In her opinion, this is the type of financial support the UK government should promote.

On Wednesday, the Office for National Statistics reported that the unemployment rate in the UK reached the highest level in 16 years. For the three months ending in November 2011, the jobless rate in the region was 8.4 percent. The number of unemployed UK citizens increased by 118,000 for a total of 2.68 million unemployed, the largest since 1994.

Despite this news, indexes in the UK climbed due to an anticipated $1 trillion increase in lending resources from the International Monetary Fund.

Despite this positive turn in the market, traders remained cautious. The International Energy Agency and the World Bank lowered both their oil demand growth forecast and global economic outlook for 2012, providing just cause for investor trepidation.

Greece cannot come to an agreement with its bondholders on how to restructure its debt. Things continue to be very unstable on that front and talks are ongoing.

The jobless rate increase was perhaps the worst news to reach UK citizens this week. Despite this, there are some positive job trends to report. Employment of 16 to 24 year-olds increased 22.3 percent during the quarter, reaching a record 1.04 million.

Total pay including bonuses also increased to 1.9 percent from one year earlier. Regular pay excluding bonuses rose by the same amount. It seems that though more UK residents are unemployed, fewer of them are between 16 and 24 years old.

What does all of this mean? Economic conditions are still very shaky and consumers should be prepared for the worst. Now is the time to consolidate and repay debt and begin saving for the future. Stable investments like gold and silver are good places to put some money.

They serve as a hedge against inflation and currency and are positioned to increase in value through the end of the year. Some experts say prices may even break records.

Consumers who are struggling financially may not find much relief this year. Food, utility, and fuel prices remain high and inflation continues to be an issue. Many citizens are struggling to get by on limited incomes now stretched further by cost of living increases.

Their income or credit status may prevent them from qualifying for loans bank offered. When this happens, some people begin exploring alternative types of financing.

No credit check loans are solutions for consumers with poor credit. Small sums of money are lent for a short period, allowing people to get back on their feet. Approval hinges on employment status and income, not credit score or history. For these loans, APR is higher because the situation is risky for lenders.

Terms for these loans range from a few weeks to seven or more years. Applying is easy and can usually be done online. Applicants with arrears, defaults, CCJs, and even bankruptcy qualify for this financing. Funding is typically done electronically to a bank account and often occurs within a few hours, a day at most.

With more rough waters ahead for the UK economy, a loan like this prepares consumers to weather the storm.

Whether buying or selling, people have dealt with pawnbrokers for hundreds of years. For the past 50 of them, pawnbroking in Britain has not been very popular. It is now becoming more so, spanning from high-class to high street. Everyone seems to be visiting pawnbrokers for no credit check loans to consolidate debt, pay household expenses, or simply finance a vacation.

Whatever their wants or needs, British pawnbrokers are ready to help consumers realize them.

Deals are the same whether they involve a few pounds, a few thousand, or much more. These loans are fully secured by the property submitted by the borrower. In addition to no credit check, there is no negative credit affect for defaulting on the loan.

British pawnbrokers lend up to 40 percent of the market value of the item. After an agreed-upon period of one to six months, the customer can repurchase the item for the loan amount plus interest. If the loan is not extended or repaid, the pawnbroker sells the property to recoup the money.

Nearly any item of value can be pawned, from broken precious metal jewelry to fine artwork. An increasing number of Brits are finding things to pawn and heading to a local shop. From this heightened demand, new pawn shops are born. While these establishments proudly reveal themselves in working class areas, they are harder to spot in more upscale sections of the city.

There, many of them look like art galleries or private banks.

Pawnbrokers like Harvey and Thompson, which operates 160 stores, are experiencing commendable year-over-year double-digit growth. This year, Albemarle and Bond hopes to increase its number of stores by 25. These situations were unheard of two decades ago, when the pawnbroking industry seemed to be going the way of the dinosaur.

What a difference 20 years and a recession make.

In reality, the industry was already starting to resurrect itself before the recent recession. National Pawnbrokers Association (NPA) chief executive Des Milligan reported that growth has been “steady” since the 1980s when major chains moved into good areas.

The association executive commented that even when economic conditions were positive, some consumers had difficulty obtaining loans bank provided and other credit.

The average customer was traditionally a female under 40 who earned a low income or was working part-time. During the past nine months, the customer base has shifted, from a demographic perspective. Now, affluent members of the middle class are crossing the threshold after being rejected by banks.

Even small businesses are using this quick financing to pay for wages or inventory until they receive customer payments.

Once considered a shady industry, pawnbrokers have done much to change the perspective of their trade. An NPA commissioned study in 2010 revealed that 80 percent of items offered to British pawnbrokers were redeemed. Pawnbrokers are happy about this because, like payday lenders, they rely on the interest.

The average pawnshop loans APR is over 90 percent but since loans are offered for less than one year, monthly interest rate is a better measure.

Higher education reforms enacted by the UK Coalition will cause university fees to increase to as much as £9,000 annually in 2012.

This has thrown many students into a state of panic and some companies are taking advantage of the situation. As the result of a media campaign, the popular online payday lender Wonga recently removed a highly controversial website page “targeting students.” Wonga may be the first company to come under attack but it is not likely to be the last.

Many students are now wondering how to afford university attendance. Lenders may now play on this unfortunate situation in an attempt to get students to take payday loans.

Students, like other consumers, should be aware of what they are doing when they apply for these no credit check loans.

Entering this borrowing arrangement without a complete understanding of the fees and terms can leave students with more financial issues than they anticipated.

The Web page removed from the Wonga site noted that though a student loan is usually cheaper than a personal loan, students may end up borrowing more than needed.

This could accumulate a “nasty debt” that may take years to repay following graduation, the page noted. Wonga then claimed that though its loans APR are much higher, the money is borrowed for only one month.

Charities, students, and MPs protested to Wonga, requesting that the page be removed, which it was within 24 hours.

Wonga claimed that the page was several years old and existed due to search engine optimization. The company published a statement noting that it listens to the public and customers.

The “old” article led to “misunderstandings,” it said. The statement noted that lending decisions are made based on various types of public information, not educational status.

To qualify for a Wonga loan, a student must have regular income, said the company, and students are a “miniscule proportion” of its customer base.

Before the page was removed, Martin Lewis from Moneysavingexpert posted it to Twitter, telling his 82,000 followers that Wonga was a “moral disgrace.”

The lender denies targeting students but this does not mean a general warning is not warranted. Before applying for an alternative loan with a private lender, students should conduct thorough research.

These loans APR can be as high as 5,000 percent, representing a very expensive form of financing.

Members of Generation Y have grown up in the online era. This is likely to make them trust online information more than older generations do.

A user-friendly interface, appealing colors, and convincing content can be enough to make these youth agree to something that may not be wise.

The Wonga page suggested that students use payday loans for emergencies or other “unexpected events.”

Campaigns like this could be successful because they focus on daily situations that anyone might encounter. The National Union of Students referred to this as “predatory marketing.”

Many students are not financially experienced so they may not understand the multiple consequences of these no credit check loans.

New research conducted by the Money Advice Trust reveals that many UK residents are in financial dire straits. According to the study, approximately 1.54 million people in the UK sought debt assistance during 2011.

The previous year, this figure was 1.4 million. The research also uncovered that nearly ten million UK residents are engaged in a constant debt management battle, making life very unpleasant.

To make things even bleaker, the study predicted a sharp increase in demand for debt assistance during the first half of 2012.

The University of Nottingham conducted this study on behalf of the Money Advice Trust. It was designed as an update to previous UK debt advice demand forecasts.

Based on the research, demand for debt advice will increase during the next six months due to only modest growth in wages plus rising unemployment.

Money Advice Trust Chief Executive Joanna Elson OBE noted that many UK families had it rough financially in 2011. Unfortunately, she said, even more people will battle with finances during 2012.

While general price levels are increasing, wage growth is relatively flat and the unemployment level is increasing. This means a larger proportion of income must go toward fuel, utilities, and food.

As daily living costs consume more income, it becomes more difficult for many people to pay other bills. Some UK households take out cheap loans to close the gap.

Those with poor credit sometimes use no credit check loans to consolidate debt. In some cases, this works but in others, a difficult situation turns into one characterized by unmanageable debt.

Some people are going as far as selling prized assets like cars, jewelry, and even their pets, just so they can pay their bills. Financial experts advise consumers to seek free debt advice before they lose control of their finances.

If loans are used to consolidate debt, they recommend staying away from subprime loan Web sites, which may be misleading.

The European Commission recently discovered that 38 British subprime lender sites contained incorrect cost details. The Office of Fair Trading (OFT) studied 47 loan sites as part of a European Union (EU) investigation regarding the subprime borrowing industry.

It found that the large majority did not comply with advertising regulations for consumer credit products. Key details were omitted regarding available products and misleading cost information was provided.

If the OFT deems it necessary, it may fine these lenders.

The investigation did not cover the enter consumer credit sector. It focused only on loans for people with poor credit, situations where the “risk of financial hardship…may be higher.”

The OFT will now turn its focus to companies that provide payday loans. The agency will determine if these lenders are complying with its Irresponsible Lending Guidance standards.

John Dalli, EU consumer commissioner, stated that consumers sometimes learn that credit is more costly than originally thought, due to missing or unclear details.

Since consumer credit can be a complex animal, European legislation exists to shed light on the topic. These regulations help consumers make more educated credit decisions.

Cheap loans are becoming more commonplace in the UK but are harder to qualify for these days. Anyone whose credit score is even slightly tarnished is likely to be rejected by banks.

With this financing off the table, many people turn to payday loans. This funding is much more expensive but is also fast, easy to qualify for, and very convenient.

Just because a payday loan is the only option does not mean the borrower must be a victim. Knowledgeable consumers avoid the most common mistakes with this type of financing.

Continuing to make minimum payments on a loan is not always enough to repair credit. A credit agency reviews the borrowing capacity in terms of income.

The amount of money remaining after bills are paid and cash is saved in a retirement or savings account is called disposable income.

If the monthly loan payment exceeds 50 percent of disposable income, credit may be negatively affected even if the person is making payments on time.

To avoid this, look for a loan that is no more than 50 percent of disposable income.

A loan that does not require collateral is called unsecured. This financing usually carries a higher interest rate because the lender is taking on more risk.

However, it does not put any borrower assets in immediate jeopardy in a default situation. For this reason, an unsecured loan is recommended over one that is secured. Though a loan default may never occur, this cautious approach is recommended.

A variable or revolving rate loan is less attractive than a fixed interest rate, fixed term loan. The loans APR may be low when the individual takes variable rate financing but it can increase at any time.

It may rise to the point where installment payments become unavoidable. Payday loans usually have a higher interest rate but this is usually fixed, allowing borrowers to budget their payments.

Selecting a loan with a longer term may seem like a good idea because it decreases the monthly payment amount. However, some borrowers do this without thinking about the near future.

If they will be retiring or are slated to lose their job, a long-term loan may not be the best solution. Shorter-term financing like payday loans may be more suitable. These are repaid within a few weeks or by the next paycheck.

Payday lenders look for several things when reviewing loan applications, including a stable job that offers steady income. This provides assurance that the borrower can afford to repay the loan plus interest and fees.

Individuals who are unable to prove their income is stable and expected to continue will most likely be denied for a no credit check payday loan.

Whether people have good or bad credit, they may qualify for payday loans as long as they have a steady paying job. By comparing loans APR, they can lower their overall expense, assuming they repay the loan on time.

Loan funds arrive quickly and the money can be used for any purpose. Responsible use of payday loans may even improve the credit score.

Personal loan rates in the UK are the most affordable in four years, according to Moneyfacts. During 2011, lenders including M&S Money, Sainsbury’s Finance, and Tesco Bank cut their rates.

The trend has not subsided, as seven lenders have already reduced their loans APR since January 1. UK residents are finally getting a break from increasing prices. They can now find more affordable financing to cover personal needs.

We are only one week into the new year but Barclays, Santander, AA, M&S Money, Smile, The Co-operative, and Tesco have already reduced the cost of their personal loans.

As one example, M&S Money reduced its rate for a five-year, £10,000 personal loan by 0.4 percent. The six percent rate currently offered is the lowest in the past four years, according to research.

Just one year ago, the lowest rate for this loan was 8.4 percent and even four years ago, the rate was 5.8 percent.

Moneyfacts spokesperson Rachel Springall reported that the current rates may not be the loans cheapest available this year. Rates are expected to continue their decline, benefitting financially strapped UK consumers.

Whether they want to consolidate debt or fund a major purchase, consumers will receive a low loans APR. Comparison-shopping is recommended based on the current level of competition within the market.

Despite this good news, loans bank offered are more difficult to qualify for because these institutions have tightened their approval criteria.

This may drive more consumers to online payday loans, which are easier and more convenient to obtain but carry a much higher rate of interest.

Though this financing is more expensive overall, consumers can also comparison shop for these to find the best deal. They should look for a reputable lender offering the lowest rate, no document faxing requirements, and instant approval.

Consumers can apply for these no credit check loans online and receive a decision almost instantly. The loan agreement is provided via email and once the applicant completes and returns it, the funds are deposited into the designated bank account.

Repayment is often made via debit card, making the process quick and easy. This type of loan is designed to be repaid by the next payday or shortly thereafter.

Therefore, consumers should not request a loan amount that is more than they can repay within that time.

Funds from payday loans may be used to pay for medical treatment, bills approaching their due date, education-related fees, and for many other purposes.

However, experts advise against using the money to make impulse purchases for unnecessary items. This type of shopping lands many people in debt, all for products that are not needed.

Consumers who qualify should apply for a low-interest personal loan from a bank before considering these no credit check loans.

If several banks reject the application, payday loans may be the best option for short-term borrowing.

No security is required and if the borrower repays the loan on time, interest charges will be much lower than if the loan is rolled to a new term.

The Bank of England (BOE) published its Credit Conditions survey on Thursday and this did not contain good news. Banks in the UK are expected to tighten their personal and business lending criteria during first quarter 2012.

Contributing factors include a weakened economic outlook and pressures within wholesale funding markets. As bank financing becomes more difficult to obtain, many UK citizens are expected to turn to expensive alternatives like payday loans.

According to the BOE, lenders will increase credit score requirements for mortgages. They will also include stricter covenants in business loans for medium and large companies.

During the current quarter, the impact of euro developments on the bank funding environment will determine the availability of credit.

In December, the BOE Financial Policy Committee reported that the euro debt crisis has increased the risks to financial stability in the UK.

Prior to this report, lenders were expecting the next three months to reflect a slight increase in credit availability. Central bank data revealed that November mortgage approvals were little changed.

During the fourth quarter, mortgage demand declined and a further decrease is expected in the current quarter. Homebuyers will also find it more difficult to obtain a mortgage, as they will need a higher credit score to get one.

However, the real concern lies with those who are already in a home. According to a recent report from the homeless charity Shelter, millions of UK citizens are using credit and payday loans to remain in their residences.

During the past 12 months, nearly one million Brits have used a payday loan to pay their mortgage or rent. An additional seven million are paying with credit cards, loans bank provided, or unauthorized overdrafts.

An ensuing battle with debt could result in a huge increase in homelessness within the UK.

Shelter Chief Executive Campbell Robb referred to the statistics as “shocking” and very revealing regarding the state of UK households trying to keep a roof over their heads.

He noted that using payday loans to fund housing costs is “totally unsustainable.” This concern does not lie with housing alone.

During the holidays, a record number of UK residents were expected to use no credit check loans like this to fund their giftgiving and entertaining.

Insolvency agency R3 discovered that approximately two million UK residents have recently applied for a payday loan. Forty-five percent of people surveyed said they were struggling to make ends meet between paychecks.

Payday lending offers a way to do this. However, loans APR as high as 4,000 percent make it easy for consumers to take on more debt. Shelter recommends that individuals grappling with debt get help immediately.

A payday loan should only be considered when other financing is not available. By promptly repaying this loan, consumers avoid huge interest rates.

Using a payday loan to cover housing costs is not recommended because it can create a cycle of dependency. UK residents who need help with monthly expenses like the mortgage or rent should consult with a debt management professional.

What were once post-holiday sales have now been transformed into January 2012 sales. Stores are trying to sell off their 2011 stock and are doing it at deeply discounted prices.

Head out to high street and jump online this week to take advantage of these great deals. But, spend wisely because a shopping spree is not a legitimate reason to get into debt.

Clothing is being sold at the deepest discounts, with many stores offering up to 75 percent off regular prices. Electronics feature the smallest discounts but shoppers can still find between ten and 33 percent price reductions.

However, a 33 percent off deal is often equivalent to paying full price earlier in the year. Retailers typically increase prices prior to a sale to make the reductions appear deep.

Experts say that a good price cut is 50 percent or more and they advise shoppers to research market prices before making purchases.

Most of the items on sale are consumer goods but online shoppers may find travel deals like inclusive perks or steep discounts for early summer holiday reservations.

Examples of retailer deals available in stores and online include up to 60 percent off approximately 40 percent of products at Austin Reed and up to 50 percent off limited items at Argos.

Debenhams has discounted more than 10,000 products by up to 70 percent.

IKEA and Laura Ashley are offering up to 50 percent off regular prices. Magnet is selling its cabinets at a 60 percent discount. Online shoppers can find up to 50 percent off on limited products from Harrods.

Those who shop John Lewis online will receive a 30 percent discount on 5195 products, 50 percent off on 6671 items, and a 70 percent discount on 416 products.

If the children did not get enough toys during the holidays, Toys R Us has a ten percent discount on limited products and 50 percent off some others.

More deals are currently available, making it easy to get caught up in a spending spree. To avoid this, shoppers should determine what they really need.

Comparing prices will ensure they get the best deal. Though an item is on sale, the price still represents a decent profit margin for retailers.

During the two weeks following Christmas, the biggest reductions in 2011 stock are made, with some items sold at an 80 percent discount.

Establish a spending budget and use a cash back or rewards credit card to pay for purchases, if possible. For big ticket items, consider using cheap loans offered by banks.

Avoid store cards, credit card cash advances, and payday loans because these carry high interest rates. A 25 to 30 percent discount is no bargain for consumers paying 25 to 30 percent interest on purchases.

Avoid limited stock sales, which are just attempts to get shoppers through the door before the season ends. Christmas decorations represent the best deals, priced up to 90 percent off, so now is the time to buy them for next year.

Newspaper discount vouchers increase the savings, allowing shoppers to get more for their money.

It seems no one in the UK is protected from financial difficulties. Recently revealed data indicates that the younger generation is facing the same miserable financial situation as their older counterparts.

According to official figures, more UK residents age 25 to 34 are resorting to Debt Relief Orders (DROs) for insolvency than any other age bracket.

A DRO is a new alternative to bankruptcy, designed for people with low incomes and few assets. It is cheaper, easier, and faster than bankruptcy and does not involve a court process.

During the one year coverage period, the individual is not required to make payments to included creditors and those creditors cannot take action against the individual.

This excludes creditors involved with student loans, child support, confiscation orders, and court fines. After one year has passed, the debts included in the DRO are forgiven and need not be repaid.

To qualify for a DRO, an individual must have qualifying debts totaling under £15,000, less than £300 worth of assets, a monthly disposable income under £50, and not be a homeowner.

If a vehicle is owned, it must be valued under £1,000. The person many not have had an existing Bankruptcy Order, Debt Relief Order, Bankruptcy Restrictions Order, or an Individual Voluntary Arrangement within the previous six years.

Debt Relief Orders went into effect in Wales and England in April 2009. Since that time, one in four people using them have been between the ages of 25 and 34.

The Insolvency Service has implemented a campaign entitled “Dealing With Your Debt” that encourages residents to take a proactive approach to debt.

Debt advice charities like the Consumer Credit Counseling Service and Citizens Advice Bureau are supporting the campaign.

Between loans, credit cards, and cash advances, many members of the younger generation are finding themselves in debt. The government and these charities encourage them to seek assistance from debt counselors to consolidate outstanding balances and establish a repayment plan.

These agencies also warm about the dangers of high interest financing like payday loans. Consumers should instead use cheap loans like those offered by banks and building societies.

Debt advice agencies can help people find the loans cheapest for them based on credit score and financial status.

Joanna Elson is the chief executive of Money Advice Trust, another debt advice charity that supports the government campaign. She commented that the financial picture is “bleaker” for the 25 to 34 years olds of today.

While their parents were purchasing a first home, establishing a pension, and saving money for their future at this age, today’s youth are struggling financially and are nowhere near this comfortable position.

Ms. Elson noted that free assistance is available to members of the younger generation who are struggling with debt. These services can make a huge difference, even helping consumers get out of the private rental market trap that is proving to be very expensive.

By taking a proactive approach to debt, 25 to 34 year olds can prevent themselves from becoming one of the 44,000 people with a DRO.

The poorest families in the UK are unable to purchase household items like clothes washers outright. Restricted access to financing from mainstream banks has led them to rent-to-own programs.

The children’s charity Barnado’s recently discovered that many low-income households are paying up to double the going price for basic household goods. These consumers have been told to avoid payday loans but a rent-to-own program may be worse.

Some stores allow financially strapped consumers to purchase electronics, furniture, and appliances on credit with weekly repayments.

In some situations, these establishments set prices hundreds of pounds higher than a high-street mainstream retailer charges.

The charity published a report on this issue, citing how one customer paid £1,074 for a refrigerator-freezer unit under a rent-to-own program with a three-year term. On the high street, this appliance featured a price tag of only £430.

In another case, a rent-to-own store was charging £780 more than a traditional retailer for a Beko washing machine. Many consumers are finding it difficult to secure credit from standard retailers or banks.

The amount of credit being offered has decreased and getting what is available has proven more difficult. Low-income UK households are finding the credit they need from rent-to-own establishments like Buy As You View and Brighthouse.

Many people reported to Barnado’s that they felt forced to use alternative lenders like these rent-to-own companies. These individuals did not have access to a bank that offered direct debit or overdraft features.

Their income level or credit score prevented them from qualifying for cheap loans from these banks. In an ironic twist, those least able to afford high loans APR are paying them, plus higher prices for the actual goods.

There is nothing illegal about the way rent-to-own companies are operating. However, the prices being charged are exorbitant and goods are marketed in a confusing manner.

Not only do some stores charge loans APR as high as 49.9 percent, they set a higher initial price for goods. Consumers have difficulty comparing prices because product model numbers are not displayed.

Barnado’s made eight calls to these retailers requesting model numbers for certain items and each inquiry was refused.

When the researchers were able to compare prices, they discovered that rent-to-own consumers were sometimes paying more for the product, interest, and service coverage plan.

The charity is requesting stricter Office of Fair Trading regulations for rent-to-own lenders. This includes displaying model numbers and prices charged for the same products on high street.

Anne Marie Carrie, chief executive of Barnado’s, said that families must be protected from being pushed deeper in to poverty “unwittingly” by dealing with such lenders.

Ms. Carrie wants the OFT to take action against these “unscrupulous lenders.” She stated that their programs and other types of expensive credit like doorstop lending and payday loans are increasing the problems that low-income UK households face.

It typically costs £112 to pay off a one-year £100 loan through a credit union, £142 for a pawnbroker loan, and £173 for a loan from a rent-to-own company.

An increasing number of Welsh families are using payday loans to fund Christmas spending this year, say experts. Debt charities and politicians are asking the Welsh government to respond before the situation gets worse.

They are calling for an end to pushy marketing campaigns used by some payday lenders. These aggressive tactics make expensive payday lending too attractive to financially-strapped consumers, especially during the holiday season.

Residents of Wales are taking out Christmas payday loans with annual interest rates up to 5,000 percent. During 2011, payday loan complaints have more than doubled within the UK.

Experts are worried that more UK residents are using payday funds to pay for holiday gifts. There were 1.2 million payday loan customers in 2009 and some experts believe this figure is now as high as four million.

The recent report from insolvency firm R3 worries financial experts in Wales. Within the next six months, 3.5 million UK residents believe they will need these no credit check loans to make financial ends meet.

Forty-seven percent of adults in Wales already have one or more credit agreements featuring an outstanding balance, with ten percent of them having four or more credit commitments.

A substantial 21 percent use credit to cover everyday expenses. The last thing these people need is a payday loan.

Many payday lending customers take multiple loans to consolidate and repay debt. R3 reported that one-third of existing payday loan customers took a second loan to pay off existing debt.

Many payday lenders do nothing to help consumers deal with their debt issues. A spokesperson for the Consumer Credit Counseling Service referred to payday financing as “the loan from hell.”

Christmas time is a financially difficult time for many consumers, leading them to accumulate debt.

Consumer Focus Wales is requesting safeguards to prevent payday loan customers from falling into debt traps. It supports a legislative cap of five payday loans or rollovers per year and wants banks to offer more short-term loans to customers in need.

Some legislators believe that the inability to access other forms of credit is driving many people to payday lenders. Since these firms can charge any rate of interest they wish, payday lending interest rates are staggering.

Credit unions are being hailed as a savior in this situation of “financial misery.” They offer communities and individuals alternative forms of borrowing considered much safer.

Legislators say that the high interest credit sector must be regulated, if only for ethical reasons. It is too easy for consumers to amass debt through payday borrowing.

Many do not even realize they are building debt because they make their regular weekly payments.

Consumers like Steve Perry, who borrowed money 64 times from 12 lenders within just 18 months and now owes £19,000, accept their role in the situation.

They recognize that their poor choices led them into a borrowing spiral. However, they feel that payday lenders have not taken responsibility for their part in the mess, which includes adding interest daily and making repayments difficult.

The holiday season typically involves a lot of spending. UK residents spend money on gifts, entertainment, travel, and more. Unfortunately, many do not have enough cash so they must turn to loans bank offered and from others sources like payday lenders.

Logbook loans have become a popular form of borrowing this holiday season. People throughout the UK are using the equity in their automobile to secure cheap loans for holiday expenses.

Companies like Mobile Money offer logbook loans to UK consumers. This company was the first of its kind in the UK and has been steadily increasing its presence. It offers same day loans to people in order to reduce financial pressures. Simon Furnival, operations director for Mobile Money, stated that more UK residents are using these short-term loans during this holiday season.

Being able to get cash in less than 30 minutes is an attractive method of financing.

Car owners simply submit their V5 car logbook to the company in exchange for a short-term loan. Mobile Money retains the MOT certificate and logbook until the loan has been repaid. Borrowers make installment payments to receive loans of between £200 and £25,000, based on the value of their car.

The maximum repayment term is 36 months and the borrower retains use of the vehicle during the loan term, making this arrangement very convenient.

The approval decision for each loan is based on the value of the automobile and ability of the applicant to repay the money. Consumers are not required to have a bank account to qualify for this type of loan. However, they must be residents of Wales or England and prove their age, income, and legal ownership as well as clear (or almost clear) vehicle financing.

Mr. Furnival said that self-employed people and individuals with a poor credit history can also receive financial assistance through a Mobile Money logbook loan.

Mobile Money alone has 33 branches throughout Wales and England. To qualify for a logbook loan, a vehicle can be either new or used and some cars are more than ten years old. Various methods of loan payment are accepted, including postal orders, debit cards, standing order payments, and banker’s draft.

Customers can even deposit cash payments at a Mobile Money location or a Barclays Bank branch. However, direct debit and credit card payments are not accepted.

Customers are only charged loans APR for the months the loan is active. Early repayment without penalty is available, allowing borrowers to reduce their interest payments. Consumers can apply for a Mobile Money logbook loan via telephone or in-person at a branch.

Loans are available six days a week and the entire lending process is quick and convenient.

When searching for a logbook loan, consumers should make sure the firm is licensed and regulated by the Office of Fair Trading. Being a member of the Consumer Credit Trade Association (CCTA) is also a strongpoint, as it enhances the credibility of the organization.

Logbook lenders that have been in business for many years and have a strong presence are usually the most reputable.

Christmas is a time when many people need extra cash. Some lenders are more than willing to provide it but not all are reputable. Residents of Manchester, England, have been warned by city council executives to avoid dealing with illegal loan sharks. Instead, they should use legitimate funding sources like banks and the Manchester Credit Union.

Consumers will get the money they need, while avoiding high interest rates and possible violence.

Nigel Murphy is the city council executive member for the environment and he issued a warning to loan sharks. Referring to them as “violent criminals,” he vowed that their illicit behavior would not be tolerated. Too often, loan sharks deal in local communities, preying on residents with money issues.

They may initially seem friendly, offering a sum of cash to help consolidate debt or pay bills, but the relationship soon becomes ugly and borrowers are pressured into repaying the money.

Those who lend money illegally rarely use paperwork, keeping customers in the dark regarding interest charges and late payment fees. According to Sara-Jane Lynch with Trading Standards, some loan sharks require loans to be secured by items like passports.

Others take a benefit, post office, or bank card and its PIN and withdraw money from borrower bank accounts themselves. These borrowers are often left with little, if any, money for living expenses.

As communications officer on the Illegal Money Lending Team for Trading Standards, Ms. Lynch has experience with these illegal lenders. She stated that when borrowers are not able to repay a loan, many loan sharks turn from nice to mean.

They employ tactics like intimidation, threats, and even violence against borrowers, in attempts to get money. In addition to a high loans APR, borrowers are burdened with constantly watching their back.

Since its establishment in 2004, the Illegal Money Lending Team has taken actions that resulted in over 190 prosecutions leading to 117 years of custodial sentences. Experts estimate that approximately 310,000 UK households are currently customers of loan sharks.

In the weeks before Christmas, illegal money lenders increase their customer base by 20 percent, according to research. Many watchful eyes are cast in the direction of the industry during this time of year.

Edward Davey, Department of Business consumer affairs minister, said that loan sharks are “pure and simply…criminals.” He referred to their use of “intimidation and violence” to “fleece”  consumers out of cash. The government continues to fund work performed by the Illegal Money Lending Team so these criminals can be brought to justice, said Mr. Davey.

Experts encourage consumers to pursue loans bank and credit unions offer before dealing with illegal money lenders. Cheap loans from financial institutions are the best option but even a more expensive payday loan from a legitimate lender is preferred to an arrangement that is not legal. Local lawmakers will not tolerate actions of loan sharks.

They proved this in 2009, when John Kiely was sentenced to five years in jail for illegally lending money to approximately 1,200 people in east Manchester.

The online peer-to-peer lending company Quakle recently collapsed, leading UK residents to wonder how safe their money is with these money exchange programs. Savers are drawn to arrangements like these due to the higher rates of return.

During the past 18 months, they have moved £192 million from their bank accounts to these sites. However, they may now be willing to accept the lower rates offered by building societies and banks solely due to the additional protection offered to their investment.

With peer-to-peer lending, investors lend money to others at an interest rate that they determine. Some lenders charge as much as 25 percent interest to those needing cash and unable to get it elsewhere. The borrower repays the loan and interest over a predetermined period. Major players in the UK peer-to-peer lending industry include Funding Circle, Zopa, Yes-Secure, and RateSetter.

Zopa is the largest peer-to-peer lender, handling £165 million with over 500,000 customers. Despite being established only last year, RateSetter already has 70,000 customers and has handled £11.7 million, with an average loan of £3,700.

Despite these growth trends, Quakle is one indicator that not all may be positive. Last week, the company emailed customers regarding its closure and warned borrowers of the potential consequences.

Funding Circle founder James Meekings assured the public that peer-to-peer lending remains a stable financing option. He said that though the small player Quakle did not make it, the industry will remain an attractive choice for savers seeking an alternative to the low interest rates offered on High Street.

Despite these reassurances, consumers should realize that peer-to-peer lending does carry some risks. These drawbacks affect both savers and borrowers.

There is always the chance that a borrower will default on the loan. This is particularly a concern in this shaky economy. Business failure, as in the case of Quakle, is the other risk. This industry is unregulated, so the Financial Services Compensation Scheme does not cover savings. Deposits up to £85,000 are protected with organizations covered by this scheme.

Concerns regarding this lack of regulation and protection have led UK peer-to-peer lenders to take steps. They have formed a voluntary trade association and are currently in discussion with Treasury officials regarding potential regulation.

The collapse of Quakle threatens efforts made by Zopa, RateSetter, and Funding Circle, the three largest players in the industry. Some fear that consumers will look to payday loans as a replacement source of funding. Payday lending offers fast cash to people who need small sums of money.

However, the interest rate is so high that many people sink themselves into debt by using these loans. Many borrow for the wrong reasons, others borrow too much, and some are sucked into a cycle of borrowing.

Insiders report they were concerned about Quakle since its November 2010 inception. The business model used by the company did not attract savers because it failed to establish trust. Saving rates were a sky-high 25 percent but Quakle based its decisions on borrower social media rankings and profiles, not caution.

Recent research regarding unauthorized overdraft charges from High Street banks revealed a very alarming situation. Some banks are charging an APR of more than 819,000 percent, which is enough put any customer into shock. The British Banking Association (BBA) has referred to using APR to calculate overdraft charges as “mathematical manipulation” but is willing to address relevant issues.

The Radio 4 Money Box program revealed that a customer exceeding a bank overdraft limit by £100 for 28 days must repay £200. This equates to an 819,100 percent APR. Eric Leenders with the BBA said the fee is considered representative of borrowing on unauthorized overdraft, not of borrowing a certain amount of money. Govan Law Center representative Mike Dailly referred to the figures as “eye-watering.”

Comparing these overdraft APRs to charges for payday loans is even more revealing. Payday lenders charge 5,000 percent or less to borrow £100 for 28 days. Lloyds TSB and Santander charge an equivalent APR that exceeds 300,000 percent. Santander commented that comparing payday loans is misleading due to the unauthorized nature of the overdrafts. Barclays, however, charges an APR of 366,000 percent for use of a pre-arranged personal reserve.

As U.S. states outlaw or cap the cost of payday lending, many lenders have relocated to the UK. They want to do business in impoverished areas, offering a way to consolidate debt or get emergency cash. Banks typically view these lenders with disdain but it turns out they may not be much better. Money Box claimed it received a large number of email complaints this year from bank customers regarding overdraft charges. Mr. Dailly echoed the sentiment that many customers are worried about the situation.

In the past ten years, the market for payday lending has grown rapidly, representing £1.9 billion in 2010. Customers typically receive a maximum of £1,000 for up to one month. Lenders process applications quickly, often providing borrowers with money the same day. The cost of this speedy service is a loans APR of about 2,000 percent. Payday lenders help consumers who cannot get approved for loans bank offered but some people feel this credit is too easy to obtain.

The Citizens Advice Bureau is one entity calling for tighter regulation of the payday lending industry. Ed Davey, the consumer minister, feels  that this move could cause people to turn to illegal loan sharks. The Department for Business, Innovation and Skills (BIS) is aware of the increased use of payday lending and has begun discussions with the industry regarding enhancing consumer protection.

In a November report from the BIS, High Street banks were depicted as delivering a “fairer, more competitive market” for consumer credit. However, unauthorized borrowing of just £100 for 28 days results in charges of £86 from Lloyds TSB, £88 from Barclays, and £100 from Santander. Borrowing the same amount over the same period from a payday lender costs only £42. The BBA’s Mr. Leenders stated that an arranged overdraft or credit card is a better way to obtain small amounts of credit over the short-term.

Many UK residents cannot afford to own a home, while others are unable to get approved for a mortgage due to strict lending guidelines. This leaves them to rent a residence, which has been a cost-effective alternative in past years.

Since the financial crisis, however, renting has become much less affordable. According to Zoopla, a property Web site, renting in the UK costs 13 percent more than the average cost to own property.

With prices increasing for other products and services, people are finding it more difficult to pay their rent each month. If the predicted inflationary increase becomes reality, things will become even more challenging.

Payday loans have risen in popularity within the UK during the past few years, allowing residents to handle temporary cash flow shortages. Lenders are now promoting them as a way to deal with increasing rent expenses.

Last month, the BBC mentioned two studies regarding UK rent costs. This research revealed that 85 percent of private rentals in South West London were considered unaffordable, with 55 percent of rentals unaffordable within the entire UK region.

Cash Genie is a leading UK payday lender that offers loans of between 75 and 750 pounds. The company believes that its financing offers a way for tenants to temporarily handle higher rent costs.

With a quick approval process, lenders like this can help tenants deal with financial emergencies. No one wants to receive an eviction notice on the door. Renters are doing whatever they can to prevent this from happening, including taking a short-term loan to help fund the rent payment.

The loan should be repaid by the following payday in order to avoid additional loans APR, which can be quite high.

People who are moving out on their own for the first time may also find a payday loan helpful. The security deposit for a rented residence can be expensive. Having to pay both the first and last month’s rent at the same time makes renting unaffordable for some people.

A payday loan can fill the financial gap until the next paycheck. Using this check to repay the loan clears the debt and allows the individual to begin renting on solid financial ground.

If falling behind on the rent becomes a regular occurrence, UK residents should seek a more permanent solution than short-term financing. A second job, promotion at work, or new career can help fill the income shortfall.

Consumers should avoid relying on cash advances or payday loans to help pay monthly expenses over the long-term. This practice is not only expensive, it can also create an unmanageable amount of debt that eventually affects the credit rating.

To find these short-term loans, UK residents need nothing more than a computer and Internet connection. Multiple payday lenders operate in the UK and each offers different loan amounts and interest rates.

Renters should shop around to find the best deal and repay the loan as soon as possible in order to avoid additional interest, fees, and slipping into longer-term debt.

Buying a home is something that fewer UK residents can afford to do. However, even that is not deterring many of them from becoming new homeowners. Desperate times call for desperate measures and these include using bank and payday loans and credit cards to fund home deposits. This increasing trend has many debt experts very concerned.

It could easily worsen the financial situation of consumers who are already on financially shaky ground.

In a recent survey by SmartNewHomes, one in ten first-time homebuyers said they were willing to use bank loans or credit cards to fund their home deposit. For many people, this deposit represents the largest financial roadblock to owning a home.

Half of new homeowners plan to use savings, while close to one-fifth will receive financial support from a parent. Approximately five percent will need to sell a personal asset such as a car in order to afford their home deposit.

Financial concerns do not end with funding the mortgage deposit, as lenders are reluctant to provide home loans to first-time homebuyers. This is causing concern for 41 percent of people in the market for their first home. They feel they will not qualify for a mortgage and the majority feel that the government should provide more assistance. Even FirstBuy, the new federal initiative announced in May, is not enough, they say.

Approximately 16 percent of people polled do not think they will ever own a home. This is a substantial figure that does not bode well for the excess inventory in the housing market. One-fifth of respondents believe that homeownership will be delayed until they reach their 40s.

Better late than never but still rather concerning for those who currently have houses for sale.

SmartNewHomes director Steve Lees stated that even declining prices for UK homes have not been enough to convince first-time homebuyers that houses are affordable. At the same time, rent is becoming more expensive, so people look for a solution.

Getting on the ladder requires that many of them resort to bank loans and credit cards. Buyers are willing to take on this debt in order to secure cheap loans for their home. Their goal is to repay the money borrowed for the deposit at a later date.

Mr. Lees recommends that first-time homebuyers who are struggling to save for a deposit take a more comprehensive look at their options. The FirstBuy government equity program may help some of them, while others may benefit from deals and incentives offered by homebuilders.

Still others may find that purchasing a home with friends or family members is a feasible solution.

To address several issues presented in the survey, a First Time Buyers’ Club has been launched by SmartNewHomes. New homebuyers can get advice and tips regarding deposits, housing prices, incentives, mortgages, and much more.

By educating these individuals, the company hopes to make the road to UK home ownership a smoother one. Finding the best way to fund a home deposit minimizes the amount of debt taken on by a new homeowner.

Peer to peer lending is gaining in popularity all the time with more people trying out this slightly off beat and controversial form of lending.

Below you will find some interesting videos, blog posts and tweets which will give you some further insights into how it works:

Q&A: Peer to Peer loans … who knows about them? | Loans Bad …

by brizzle born and bred Question by BNICKS: Peer to Peer loans … who knows about them? I am in the market for a personal line of credit not installment.

Want a P2P Loan? See This Profile of a Typical Peer-to-Peer Borrower

Here is the profile of a typical P2P loan borrower, in terms of age demographics, credit characteristics and other factors…

StockGuru Shines its Spotlight on WikiLoan, Inc. (OTCBB: WKLI …

Dallas, Texas (November 7 , 2011) – StockGuru Shines its Spotlight on WikiLoan, Inc. (OTCBB: WKLI), a peer-to-peer lending platform. The Company announced on November 4, 2011, that it has shifted its strategy….

What is a Peer-to-Peer Loan or Peer to Peer Lending?

In this article you will learn the definitions of peer-to-peer loans and peer-to-peer lending?

StockGuru Shines its Spotlight on WikiLoan, Inc. (OTCBB: WKLI …

Bold Stocks Blog » StockGuru Shines its Spotlight on WikiLoan, Inc. (OTCBB: WKLI) Upon Announcement of Hybrid Approach of Peer-to-Peer Lending —

Peerform.com Peer to Peer lending | A smart way to borrow money

Peerform is a peer-to-peer lending platform that connects people who want to borrow money with investors. Peer-to-peer lending is an alternative to the banking system that provides the following services: Better fixed interest rates…

Your Money: Peer to Peer Lending

As the government’s rescue plan slowly unlocks the credit market, you may be considering peer-to-peer lending as a way to get cash flowing. AP Personal Finance Editor Trevor Delaney explains.

Prosper Peer to Peer Lending Review

www.LoanUnsecure.com Jonathan reviews Prosper.com the peer to peer lending marketplace. Pro’s and cons

fund a yurt peer to peer lending

Ron and his friends explain peer to peer lending

Peer Based Lending; How Peer to Peer Lending Works

Get a loan from peers who value what you value! A short video explaining how peer to peer lending works.

Latest Peer to Peer Lending Tweets

By smallenterpcro

The Better Business Taskforce launched a formal process for appealing bank small business lending six months ago. Small businesses are urged to make their appeals now if they feel their denial for loans bank provided was unjustified. Close to 40 percent of businesses filing appeals have come out winners.

The recent Bank of England report revealed a ten percent year-over-year decrease in outstanding loans to companies with under £1 million turnover. This has led financial experts to prompt small businesses to fight for the money they require. Without this financing, many small businesses will be forced to close their doors, resulting in a gloomy holiday season.

There are several ways that small businesses can have a bank lending rejection overturned. HSBC senior commercial banking manager Mike Conroy recommends that companies approach banks with detailed information regarding their business. He said that when a business is unclear about how much money it needs, this does not inspire confidence from banks. Most rejections are due to inadequate financial information like cash flow predictions.

Small businesses are entitled to appeal lending conditions as well as the decision. Examples include being asked to secure a loan with a home or being offered unusually high loans APR. Most banks will respond to appeals with a 30-day period. Barclays reported that the majority of appeals it receives are resolved within one week. Lloyds TSB reviews appeals within 15 business days, resolving 90 percent of issues in that time. It also offers a £150 goodwill payment to any business with a successful appeal.

RBS-NatWest has a lending appeal hotline for businesses. Use is not limited to bank customers, as the financial institution has also been help businesses that were rejected by other banks, according to a spokesperson. Appeals to Santander bank are handled by a different business banking team than handed down the original lending decision.

Though the small business may be the economic lifeblood, banks do not seem to treat it that way. New businesses are finding it nearly impossible to get loans bank offered. Even existing small businesses are having difficulties. Despite Project Merlin from the government, some say banks are not lending enough, which is strangling small business growth.

When they cannot get approved for loans from a bank, some small businesses in the UK are turning to alternative sources for financing. Retail bonds are proving popular with both investors and small businesses. The business issues bonds to investors, providing a better return on lending than bank savings rates.

Personal asset lending, which requires the business to place assets like art or jewelry as security, is also very attractive.

Many banks and companies offer invoice factoring in additional to traditional loans. The business receives a percentage of an invoice due and pays the full amount to the lender upon invoice settlement. Peer to peer lending has received more notice since the financial crisis.

When businesses are turned away by banks, they look for a group of investors who each provide a portion of the financing needed.

Private equity companies are businesses that invest in people and other businesses that seem viable. Though lending terms may be stringent, it may be easier for a business to secure a loan here than from a bank. Angel investors are a bit more entrepreneurial, seeing the bigger picture rather than focusing on quick profits.

The UK is still receptive to small businesses but companies must be creative when looking for financing. The government is trying to help but the credit environment is still tight so alternate sources offer a life ring for small businesses trying to grow.

What was once considered alternative funding could someday be the primary way that small businesses get financing.

The low UK interest rates are great for people needing cheap loans. However, the 0.5 percent base rate can be detrimental to holders of an equity-release home loan, which involves borrowing against the security in their property. Early repayment penalties are not widely publicized and they can be quite hefty. Equity-release loan holders should be aware of early repayment consequences.

People pay off equity-release loans for many reasons, including the desire to downsize. Penalties for early repayment can range from five to a whopping 25 percent of the amount borrowed. The fee is imposed because with these loans, APR is fixed. Rates are currently between six and seven percent and early repayment will leave lenders in a pickle.

Since lenders are unlikely to receive the same return on safe investments like gilts, they impose a substantial early repayment penalty. Though the situation is bad for those who want to repay early, it is much better for people interested in taking out an equity-release loan. Since gilt yields and interest rates should be higher in the future, the early repayment penalty should be little or nothing.

The equity-release loans cheapest for most people will likely be gilt-linked. According to Dean Mirfin with specialist equity-release broker Key Retirement Solutions, penalties of most annuity-backed programs are linked to gilt yields. These are not recommended for consumers who know they will be repaying the loan early. A better deal is a straight fix-rate mortgage that features a flat and decreasing penalty running for five or ten years.

There is a tradeoff for flexibility and options with these loans, says Mr. Mirfin. Programs featuring gilt-linked penalties usually have rates 0.25 to 0.5 percent lower than fixed-rate penalty programs. For people borrowing for the long-term, lower loans APR is more important, making now a great time to take an equity-release loan.

People who have saved money their entire lives never dream of needing loans to pay their bills. However, some savers may find themselves in this situation due to no fault of their own. As countries going bankrupt are unable to print euros, the global banking system is seriously threatened. In addition, money printing like that being done by Britain has inflationary consequences.

Electronic bank runs could result in savers withdrawing trillions of dollars in deposits in mere hours. In just one day after a euro zone banking collapse, the U.S., UK, and Asian banking systems could fall. Savers who did not act quickly enough could find themselves searching for cheap loans to replace the money they lost.

The state of the financial system is worse than in 2008 when Lehman went bankrupt, bringing the U.S. financial system to its knees. In the event of a collapse, deposits over the £85,000 limit will be at risk in all banks other than the government-backed National Savings and Investments (NS&I). UK depositors should take steps now to reduce the risk of losing funds and protect loss of value due to inflation.

Maintaining at least two current bank accounts across banking groups is recommended. At least one account should be with a relatively safe bank like HSBC. After listing each account and deposit amount, then grouping these by banking sector, identify any banking group balance exceeding the £85,000 limit. Immediately move the excess funds to another banking group or transfer them to a spouse.

Savers should have a procedure in place to quickly transfer money from high to low risk banks. Small building societies and banks are higher risk than larger ones. A sample approach is to open an NS&I Direct Saver account right now and transfer cash into this should a sovereign debt crisis begin unfolding.

The Council of Mortgage Lenders (CML) revealed that in 2010, nearly two million UK households made a move that will save them an average of £2,600 annually. They opted for a standard mortgage loan after the expiration of their original fixed-term mortgage. The switch was valued at approximately £4 billion per year.

Typically, the standard variable rate (SVR) offered by a lender is higher than its fixed rate loans, which makes this situation unusual. SVR is tied to the Bank of England base rate, which fell due to the financial crisis. Currently C&G and Nationwide have 2.5 percent SVRs. In June 2008, it would have cost 6.6 percent to take out a two-year fixed rate loan.

Some economists worry about borrower shock when the base rate increases from its historic 0.5 percent low. The CML is not concerned because rates are only expected to increase to 0.9 percent by the end of 2012 and to two percent by 2015. If this happens, 85 percent of variable rate mortgage holders will still have lower payments at the end of 2012 and about 58 percent will be paying less than their original payment through the end of 2014.

According to the CML research, most borrowers have either ten or 20 percent equity in their homes, making refinancing attractive. The Bank of England reports that remortgaging does not pay for homeowners with a ten percent deposit. For them, the average fixed rate for a two-year loan is 5.28 percent, whereas the average SVR is 4.11 percent.

Approximately 1.5 million homeowners have fixed rate mortgage loans that expire in the next two years. Remortgaging may not be as exciting for them because many of them have cheap loans. They may not receive the same windfalls in interest rates as people who took out mortgages during 2007 and 2008.

According to some UK lenders, recent housing market figures are promising signs and may even indicate a positive trend. Extremely low loans APR and the variety of loans bank offered have increased market activity. Low property prices have led many people to become landlords and the remortgaging market is also bustling with activity.

With housing prices so low, the buy to let market is exploding. Those who are already homeowners are taking advantage of remortgaging deals. During August alone, over 34,000 UK remortgage loans worth a total of 4.2 billion pounds were approved. People who have a large amount of equity and who can make large deposits are upsizing their residences.

According to information recently published on the MoneySupermarket Web site, fixed two-year mortgage loans APR had dropped to a record low. Competition amongst lenders is heated and should remain this way until news of a base rate increase reaches the public. Council of Mortgage Lenders Director Paul Smee stated that lending in August “showed welcome signs of life” despite concerns coming from the euro zone.

Despite the general economy being gloomy, individuals with mortgages are benefitting from the low interest rates, said Mr. Smee. This trend reaches beyond the borders of England to Scotland, according to Mark Dyason with Edinburgh Mortgage Advice. He commented that the mortgage market in that country is also starting to gain momentum as the “Mexican standoff” between Scottish sellers and buyers has ended.

People are seeing the number of cheap loans available and are finally taking steps to become homeowners, despite an otherwise repressed economy. In Scotland, Mr. Dyason attributes some of this to the fact that sellers have become more realistic. He notes that while the UK is not yet on stable economic ground, the latest mortgage statistics indicate movement in the proper direction.

Despite business lending targets established by the government, more difficult lending conditions will lead the cost of credit to increase, reported small business funding source Interface Financial Group (IFG). The company operates in the UK and several other countries. Services include providing businesses with short-term financial resources like debtor, construction, and invoice factoring.

According to the Bank of England, the cost of credit for small businesses will increase during the remainder of this year. At the same time, the bank expects that demand for business loans will decline. A new approach being taken by some banks is to view credit risk by industry sector rather than on a company-by-company basis. Major business lenders claim this has always been standard practice.

The uncertainty that surrounds growth prospects is leading to industry differentiation in terms of risk during the current economic climate, said spokespeople for the Bank. IFG Chief Operating Officer Paul Barnsley commented that the Bank report was discouraging, making it clear that small businesses need assistance with funding. Customers of alternative funding do not experience the same issues as those who pursue traditional financing, he stated.

The view that invoice factoring or discounting is a last resort is an outdated, incorrect one, commented Mr. Barnsley. Properly used, factoring can assist businesses with growth and funders offer a great deal of flexibility. Small businesses obtaining new traditional loans during the summer were forced to accept stricter terms and collateral requirements. This trend is expected to increase during the fourth quarter.

Based on this situation, some experts doubt that commercial loans bank issued will meet lending targets established by the Coalition Project Merlin agreement. Mr. Barnsley recommended that businesses explore the invoice financing market for additional lending options. Entities operating in this arena are quite welcoming and provide a range of funding solutions.

As the difficult economic times continue, many people in the UK are struggling financially. Millions who were once financially stable are having trouble with mortgage and utility payments. People are seeing their hours cut at work and many others are being made redundant, taking financial concerns to a new level.

The stress of worrying about money on a daily basis can eventually take its toll emotionally and physically. Before people get to this point, they should explore ways to consolidate debt and get access to additional funds. Logbook lending is one solution that many Brits find appealing. Logbook loans are offered against the value of the car owned by the borrower.

Not only is this type of loan easy to apply for, there are few requirements. The only stipulations are that the car be registered in the name of the borrower and be owned outright. The equity of the vehicle is released in the form of a loan. The borrower is allowed to keep the car while repaying the loan over a period of up to 36 months.

Logbook loans are often funded within one hour of application approval. Borrowers receive loans of between £300 and £25,000 based on the equity they have in their vehicle. The quick payout and respectable loan amount may be all it takes for someone to get through these recessionary times unscathed. Lenders work with borrowers to ensure that the loan repayment amount is affordable so there will be no complications.

A logbook loan application can be completed online and requires the individual to supply personal information and details regarding the vehicle. Those who feel more comfortable completing an application over the phone can speak with a local representative. Once the loan is approved, the borrower must visit a logbook loan store to complete the process.

Between June and the end of August, UK unemployment jumped 114,000. At 2.57 million, it is the highest it has been in 17 years. For the seventh month in a row, the number of jobseeker allowance claims increased, reaching 1.6 million. Fears have resurfaced that the UK may be headed for a double-dip recession but the Prime Minister stood strong regarding austerity policies on Wednesday.

The Prime Minister stated that reversing current austerity policies would create a tailspin for the economy, resulting in higher interest rates. HW Fisher & Company insolvency expert Brian Johnson stated that while the unemployment numbers are bad, the omens are much worse. The weak economy and additional public sector reductions could force the country into what he called “another winter of discontent.”

Unemployment rose 0.4 percent in a mere three months and is now 8.1 percent, the highest in 15 years. Youth unemployment now represents 21.3 percent of people age 16 to 24. It increased prior to the economic crisis, a time when the economy was growing. In this new economy, it will be difficult to correct this because businesses lack the money and time to train new graduates.

While university graduates find themselves less employable, older people are facing their own struggles. Part time jobs that helped temper the increase in unemployment in recent years are dwindling. During the last three months, the number of UK jobs declined by 178,000 and 74,000 of these jobs were held by people over age 65.

Women have also been severely affected by the employment situation. Most public sector jobs are held by women and job cuts in this area have been devastating to them. It seems that some younger people, the elderly, and females may soon be in need of loans or other financing tools to tide them over during periods of unemployment.

The Bank of England recently decided to allot an additional £75 billion to its quantitative easing program. Industry experts believe this could provide the mortgage market with a boost. Interest rates were kept steady at 0.5 percent by the Monetary Policy Committee (MPC) last week as the quantitative easing program was increased to £275 billion.

According to the MPC, inflation will exceed five percent within approximately the next month. However, it is expected to decline sharply in 2012. The MPC felt that the quantitative easing increase was needed to keep inflation under its two percent target. Mortgage lenders are now required to shift from offering low loans APR to increasing their willingness to lend.

Phoebus Software Managing Director Paul Hunt stated that the decision regarding quantitative easing provides lenders with increased confidence. They are more likely to view individuals taking mortgage loans as being able to sustain debts over the long term. Ray Boulger, a senior technical manager with John Charcol, believes that lenders will offer fixed loans APR that are more competitive over the long term.

Mr. Boulger said that by concentrating purchasing power at the long end of the market, the Bank of England can contract yield spread. This will pave the way for lenders to offer fixed rates for ten year and longer loans that feature a better margin over the five-year rates witnessed thus far. The cost of this, said Mortgages For Business Managing Director David Whittaker, is inflation exceeding the target rate.

In the opinion of Mr. Whittaker, being faced with higher than targeted inflation in the short-term worries some UK consumers. First-time homebuyers saving money for large deposits required to secure a mortgage find little comfort in an increase in the cost of living. Mr. Whitaker believes the situation will only expand the already growing market of private rentals.

The credit rating agency Moody’s recently downgraded deposit and senior debt ratings for 12 financial institutions in the UK. It believes that the largest lenders will continue to receive government support, while smaller banks will be left to fail. This recent move by Moody’s has only worsened an already shaky level of consumer confidence.

Moody’s stated that the downgrade of lenders including RBS and Lloyds does not indicate that the UK banking system is weakened. Despite this and reassurances from the British Chancellor, many savers are feeling nervous. Before they reach panic state, they should learn how to determine the safety of their bank.

One of the most important things to keep in mind is that the Financial Services Compensation Scheme (FSCS) covers deposits with all building societies and banks that are authorized by the Financial Services Authority (FSA). If a covered bank defaults, FSCS will cover the first 85,000 pounds of lost deposits per customer, per bank, up to 100 percent. People should visit the FSA Web site to see if their bank is covered.

Due to the maximum FSCS compensation limits, people with deposits exceeding the threshold may want to spread their money between multiple banks. Individuals with foreign bank deposits may need to file their initial claim against the foreign scheme in the event of a default. FSCS would pay top-up compensation, resulting in a lengthy process.

Individuals with loans need not be concerned about the size of their bank but savers should realize that large banks might be better. Though recent evidence reveals that size does not guarantee security, smaller banks are often more dependent on a single market sector. In addition, they usually have smaller reserves to protect against unexpected setbacks. Also, keep in mind that banks pay credit rating agencies to assess them, so banks may dictate the results.

Andrew Hamilton is the vice chancellor of Oxford University and he is worried for the UK. He believes that unless the government allocates more money to research funding, the region could lose its best students and academics to overseas competitors. The government recently reduced funding to universities, leading the UK to start “treading water,” according to Mr. Hamilton.

According to the professor, the U.S. and China have increased public spending on higher education. Within the last year in the UK, the portion of GDP spent on universities declined from 1.3 to 1.2 percent. At his annual speech on Tuesday, Mr. Hamilton explained that other governments are increasing their investment in the higher education sector with an eye on research.

To compare, while Oxford receives 40 percent of its research income from the government, Harvard gets 80 percent from the U.S. government. China is making a multibillion-pound investment to create 100 top universities within this century. Mr. Hamilton encouraged UK ministers to be patient because it can take many years to reap the benefits of research.

Another issue Mr. Hamilton focused on was the lack of funding for graduate students. Doctoral students abroad receive “five-star packages” from other universities, he said. Only half of all Oxford postgraduates, on average, receive full scholarships. This leads them to take out loans bank and privately provided to fund their rather expensive education. In extreme cases, some of the best graduate students must turn down offers to study at Oxford.

Research cuts could deprive doctoral students from low and average income households of an opportunity to further their research. In some fields, a master’s or doctoral degree is now required, making the situation more unfair. Mr. Hamilton fears that if the “competitive disadvantage in funding” goes unaddressed, higher education in the UK will lose its best academics and students to international competition.

As concerns grow regarding the UK economy, Chancellor George Osborne is proposing that public funds be lent to British companies struggling to qualify for bank loans. Under the proposal, the Treasury would sell government or Treasury bonds to purchase bonds issued by small and medium sized companies. Billions of pounds would be involved in this credit easing program.

It is clear that the European debt crisis could make a severe impression on the UK banking system. The credit crisis occurred three years ago and companies are still being denied access to loans bank issued featuring reasonable terms. Under the new proposal, one possible approach would involve instructing the Bank of England to purchase corporate bonds.

The economy has changed little in the past year and Mr. Osborne has no plans to slow down the deficit reduction. He believes credit easing is the best way to stimulate the economy. It is a change from his previous quantitative easing approach that focused on the Bank of England making new money to purchase government bonds.

However, Mr. Osborne said he would approve reactivation of a quantitative easing program. Experts expect policy makers to do this during their meeting next week. The new credit easing plan enables authorities to purchase assets of the private sector in order to increase credit and liquidity within the economy. According to National Institute of Economic and Social Research Director Jonathan Portes, many people have requested this approach, which he feels is long overdue.

Credit easing could help prevent a second credit crisis, said Mr. Osborne. He also noted that it will provide British businesses with a needed boost, helping to solve the ongoing issue of inadequate long-term investments in small businesses and enterprises. The budget deficit will not be augmented by this program and the government can make progress toward its Project Merlin lending goals.