On Monday, British Parliament began debating whether to empower regulators to cap costs for high-priced borrowing including payday loans. Stella Creasy, Walthamstow MP, tabled a Financial Services Bill amendment designed to better protect consumers. She has been outspoken regarding practices that she refers to as “legal loan sharking.”

Other Labor MPs backed the amendment, three of them formally signing it, heading into the vote.

Bank regulation reform is one of the other measures included in the bill, which calls for formation of a Financial Conduct Authority (FCA), designed to replace the Financial Services Authority. The FCA would assume consumer credit regulation responsibility from the Office of Fair Trading (OFT).

Part of its duties would involve preventing the misselling of poor financial products to British consumers. The amendment proposed by Ms. Creasy would permit the new financial regulator to impose a maximum amount that lenders may charge for credit.

The limit would not pertain to the loans APR but to the total borrowing charges represented by combining interest and arrangement fees. The amendment would also permit the regulator to impose a maximum duration for a credit service or product to any single consumer.

The OFT is currently permitted to sanction lenders that breach provisions of their consumer credit license. However, license removal can take years and Ms. Creasy does not believe that current fines deter unacceptable practices.

How many MPs would vote in favor of the bill was unknown prior to the vote. Ms. Creasy noted that many Tory MPs were frustrated that their party had not proposed an alternative. She also commented that with the government not considering any solutions, more Brits were getting into trouble with payday loans.

Her proposed amendment is designed as a beginning to increased regulation for the industry.

The credit crunch has led many people to find alternatives to loans bank provided. Online and brick-and-mortar companies offering no credit check loans represent some of these. Consumers can even use a mobile phone to apply for payday loans. They may not be the loans cheapest around but they are much easier for people to get.

The money is intended for short-term borrowing and the financing is relatively harmless when used in this manner.

What Ms. Creasy takes issue with is the high loans APR that make it easy for borrowers to amass debt when they fall behind on loan payments. The MP stated that the UK does not strictly monitor companies within this industry. She would like to eventually see an overall cost cap for this borrowing, similar to what exists in other European countries.

Her current amendment does not impose such a cap but instead empowers the regular to do so.

Ms. Creasy spoke in support of the Financial Services Bill and her amendment on Monday. She stated that establishment of the FCA would allow the government to quickly take action to prevent the issue from worsening. She also called on the government to invest more in financial education and credit advocacy services as well as increase sources of affordable credit.

Every day, UK debt management agencies field hundreds of calls from consumers looking for help. The particulars of their story are different but the tales feature several common themes. Though making mistakes is part of the financial learning curve, being aware of the most common pitfalls can help you avoid them.

These tips may even keep you out of debt for the long haul, making for a much less stressful life.

Helping someone financially may seem like the right thing to do but it can lead to trouble. Guaranteeing a loan for someone or taking out a joint loan could end badly if the other person cannot make the payments. Never take on one of these roles unless you are able to repay the full loan balance.

Along the same lines is adding a cardholder to your credit card account. This individual is not responsible for his or her spending on the card so think carefully before allowing someone to spend money in your name.

Some people use credit cards for all their purchases, including big-ticket items that they could purchase with cheap loans. Maxing out a credit card is not an issue to them as long as they can afford the minimum monthly payment.

This approach usually results in interest charges that are much higher than loans APR offered by financial institutions. In addition, the debt will take years to clear, making it tempting to spend on another credit card, racking up a second balance.

Some credit products feature special offers like limited-time discounts. If consumers do not cancel the credit or repay a balance in time, they may be penalized. To avoid facing charges and fees, understand the conditions and terms of these offers. Pay off a balance or cancel before the deal expires to avoid falling into a trap.

When many consumers find themselves falling behind with payments, they use new credit to pay existing credit balances or household expenses. This can lead to a debt spiral from which recovery is difficult. As soon as you begin falling behind on payments, get debt advice. Look for a charity or specialty group that provides free debt counseling. There is no reason to pay for this service when it is available at no charge from reputable groups.

Once debt rears its ugly head, the first instinct may be to consolidate it. Unless the total balance is small enough to be repaid quickly, this is not recommended. It only prolongs the repayment period and for some people, it can increase debts. If a consolidation loan does not feature affordable monthly payments, new credit may be needed to cover household bills, creating a bad situation.

Consumers should have an emergency fund that represents six months’ of income. For those who do not, payday loans represent one way to cover unexpected emergency expenses. Shop for the best rate and repay the loan quickly to minimize interest charges.

By staying out of debt, people create a more stable financial situation, making life much easier.

Unless you have received a financial windfall, you will probably need to borrow money at some point. Homes, higher education, and even automobiles are expensive these days and most people cannot afford to pay for them with cash. Whether or not to borrow is no longer the question.

It is about learning when the time is right and how to accomplish it. Borrowing for planned reasons like home improvement or repairs can be quick and painless if you take the right approach.

When short-term credit is needed, use a credit card and repay the balance in full by the end of the statement period to avoid an interest payment. Consumers with excellent credit may qualify for an introductory zero percent interest period of up to 18 months.

If you need to borrow cash, compare interest rates for credit card cash advances with payday loans APR to see which are less expensive. The goal should always be to get the best deal and repay the money as quickly as possible.

Unless you cannot repay credit card balances in full, avoid using zero percent interest balance transfer offers from credit card providers. These simply shift debt from one card to another. Repay the debt immediately rather than prolonging the situation.

If you must use a balance transfer, select a card that offers a long interest-free term so you can repay the balance before the interest kicks in.

If you have savings, there is no need to borrow. Interest rates on savings accounts are extremely low but interest rates on credit cards are in the double digits. Unless you manage to secure a very low credit card or mortgage rate, use your savings to pay for items.

Anyone with unwanted goods should consider selling these for extra cash. It is easy to sell items through online auctions and there are special websites for selling mobile devices.

It may be difficult to qualify for loans bank offered if you have a low credit score. A limited time, zero percent interest credit card may be an option for some people. However, others will need to explore no credit check loans that offer competitive interest rates and are affordable to repay within the initial term.

Avoid rolling over payday loans because the interest and other charges that accrue will increase the debt.

When searching for the loans cheapest to them, consumers should be aware of the meaning of “representative APR.” A lender is only required to provide this rate to 51 percent of accepted applicants. Most providers only reveal the actual APR after a loan application is submitted, which places a mark on the credit file of the applicant.

In a true emergency, crisis loans are available to anyone, subject to savings caps. Budgeting loans are available to benefit recipients for a wider range of purchases. Payday loans can also meet short-term, emergency cash needs. Though loans APRs seem outrageously high, the financing is designed to be repaid within several weeks, drastically reducing the interest charges.

For many years, small U.S.-based businesses have had options for obtaining financing. In the UK, small businesses have long been beholden to loans bank provided. Only recently have they had access to alternative credit sources, spurred by restricted conventional lending in the aftermath of the financial crisis.

These non-traditional sources include peer-to-peer lending and payday loans.

According to statistics from the Federation of Small Businesses, 15,000 U.S. financial institutions, split between banks and credit unions, offer commercial financing. In the UK, a mere five lenders represent over 90 percent of loans issued to small and medium-sized businesses.

Said FSB policy head Graeme Fisher, “Alternatives to the banks do not have a great profile in the market.” Slowly but surely, this seems to be changing.

To give the stagnating economy a boost, the British government is supporting non-bank lending. As a result, business owners are turning their attention toward asset leasing, invoice finance, community finance institutions, peer-to-peer lending, and payday loans.

As one of the newest concepts in UK lending, peer-to-peer lending involves people lending to each other as well as to small businesses. Lenders receive better returns than they would with a deposit account at a bank and borrowers find the credit easier to obtain.

The peer-to-peer lending sector is still very small, representing only between £100 and £200 million annually. It also is not without its drawbacks, as there is a high level of risk involved for lenders and not all prospective borrowers qualify. Aside from this financing, small and medium enterprises (SMEs) in the UK have limited options because the other forms of nontraditional credit are not easy to find, though many hope this will change.

One type of business credit that has become more popular in recent years is payday lending. Providers of short-term, no credit check loans are busy providing financing to SMEs that do not qualify for loans bank provided. They offer loans lasting up to four weeks, designed to help a borrower cover expenses until the next paycheck.

Business owners are using this financing to cover the time gap between invoice issuance and receipt of payment. UK regulators have their eye on this market sector because loans APR are high enough for some business owners to land themselves in debt.

In the U.S., these no credit check loans became very popular very quickly. According to recent research conducted by an American bank deposit regulator, one-quarter of American households either do not have access to traditional banking services or prefer this short-term financing due to its relaxed qualification criteria.

UK residents are enjoying the same experience but with increased scrutiny from the Office of Fair Trading, this trend may be short-lived.

While businesses may not find payday loans cheapest of all options, they may find them the easiest to get. Money is provided quickly and as long as the balance is repaid as agreed, the interest component is not too high. However, SMEs must be careful not to overextend themselves or they may be unable to repay the credit extended to them.

As global financial troubles continue, more UK residents are turning to payday loans to cover expenses. In the past, the typical payday lending customer earned a low income and was desperate for fast, no credit check loans. Today, these lenders are catering to more people who earn a decent income but need small loans with few questions asked.

They are flocking to websites that offer short-term financing of between £100 and £1,500.

The online payday lending industry has exploded in Britain, offering consumers a simple online application and almost instant approval. Though many lenders are very reputable, some are considered predatory and are now being punished by the government.

Consumers need protection from these tricksters and the government is more than willing to provide it. Eventually, only the most legitimate lenders will populate this market.

Institutions like PriceWaterhouseCoopers agree that credit card advances and loans bank provided are difficult to get due to European economic conditions. Payday lending is fast becoming the chosen alternative and this industry is currently the only consumer credit market sector experiencing growth.

While payday loans are faster and easier to obtain, many people criticize the high loans APR, which can reach thousands of percent. Since this financing is not intended to last for a few months, let alone a year, industry supporters comment that using APR as a measurement of loan cost is misleading.

According to data released by the UK Consumer Credit Counseling Service in March, the number of customers with payday loan debts has grown six-fold since 2009, when 2.6 percent of CCCS customers used this financing. Consumer Finance Association chief executive David Lamidey reported that consumers are focusing on repaying credit card debt.

Worries about future income streams have led people to free themselves from long-term debt. These individuals are taking advantage of the ability to borrow only the money they need over the short-term.

Though payday financing may not be the loans cheapest available, they are not too expensive if they are repaid within the initial term, usually a maximum of one month. However, many borrowers with low incomes are finding this difficult to do. When they rollover their loan to another term, they accrue interest. Those who make late payments are socked with charges that increase their balance.

The Debt Support Trust reports that UK consumers owe £1,200, on average. Forty percent are paying their basic living expenses with borrowed money. Most payday loan customers report borrowing from one payday lender to repay another. The average customer has four no credit check loans from different lenders.

The way this financing is being used, not the availability of it, seems to be the problem.

Brits in debt should examine their expenses and income. There may be easy ways to reduce living costs so they can repay debts and decrease their dependence on loans. Increasing income by temporarily taking a second job to repay debts may be another option.

Consumers should never find themselves dependent on loans to make ends meet on a monthly basis.

Last month, we informed you that the Office of Fair Trading (OFT) stripped Yes Loans of its credit license. Yes Loans is one of the largest loan brokers in the UK and was accused of engaging in “deceitful and oppressive business practices.” Representatives recently announced that Yes Loans and its associated business, Blue Sky Personal Finance, will not appeal the OFT decision.

Therefore, the companies will not be able to broker loans for customers.

A credit brokerage firm like Yes Loans matches prospective borrowers with lenders willing to offer financing. The OFT discovered that Yes Loans misled some customers into thinking the company was a loan provider, not a credit broker. Other consumers were provided payday loans with higher loans APR than the products they initially requested.

The company also requested credit card details for false reasons and deducted brokerage fees without consent.

OFT Director of Consumer Credit David Fisher commented that the agency’s “successful action” against Yes Loans “sends out a strong message” that inappropriate practices will not be tolerated, regardless of company size. Mr. Fisher explained that the difficult economy has driven more financially desperate consumers to payday loans.

This has made increasing standards a priority for the OFT and the industry.

The OFT also decided to revoke the consumer credit license of Money Worries, an associated debt management firm. This company lodged an appeal, which allows it to retain its license until an outcome is issued. A statement issued by all three companies clarified that Blue Sky and Yes Loans are still permitted to trade but may not perform duties covered under a consumer credit license, including brokering loans.

The statement explained that the decision not to appeal the OFT decision regarding Blue Sky and Yes Loans was strategic in nature and should not be considered an acceptance of the OFT claims.

Blue Sky and Yes Loans reportedly underwent a major reorganization in late 2011 to address the concerns resulting from the several-year investigation by the OFT. Included in the changes made was the elimination of upfront fee charging.

However, this was not sufficient for the OFT due to the length of time that unacceptable practices had been employed and the fact that some members of leadership were still in place. According to the statement, no jobs will be lost because staff will be provided positions within the organization based in Cwmbran, South Wales.

The Financial Ombudsman Service revealed that complaints about credit brokers have been rising. During the last six months of 2011, the agency upheld more than eight in every ten complaints received regarding Yes Loans. Yes Loans had been trading since 2003 as a broker for loans and claimed to process approximately 50,000 loans each month.

Though this is a blow to the industry, many providers of payday loans are reputable and do not engage in questionable tactics. They offer small value no credit check loans designed to improve personal financial situations. Consumers use these loans to consolidate debt and pay emergency expenses, repaying the loans with their next paycheck.

Though Christmas presents have been in use for months, some young people in the UK are still paying for them. New research released by Halifax reflects that one in five UK residents between the ages of 18 and 44 is still repaying debts amassed last Christmas. Holiday misery has taking on a new meaning for these people and it may extend through this Christmas.

With the economy still floundering, many young folks hope that they still have jobs by that time so they can continue to pay these bills.

A credit card was the most popular method of payment for Christmas debts, based on the survey responses. Nine percent of respondents who used credit to buy their holiday gifts still have a balance on their card.

Some of these people say this balance will still be around after presents have been unwrapped this year.

To make matters worse, they will need to find a way to pay for their 2012 holiday gifts.

Residents of northern England reported spending the most on their 2011 holiday festivities, paying £28 more than the £502 national average. In the northeast, 21 percent of people said they were still paying for Christmas.

Despite the financial situation in Scotland, only nine percent of residents reported they were still paying for holiday purchases. Many managed to consolidate debts and repay them to get back on track financially this quarter.

Despite the financial issues that many UK residents encountered last Christmas, only 19 percent have developed a plan for covering their 2012 Christmas expenses. Halifax current accounts head Anthony Warrington reported that though all consumers face unexpected expenses at one point or another, Christmas is not one of them. The holiday arrives every December and consumers should arrange far in advance to cover related expenses.

Mr. Warrington noted that Christmas is always an expensive time of year, which makes budgeting important. By allocating money in advance, consumers avoid accumulating credit card and loans debt when buying holiday gifts. They can pay with cash or use short-term, no credit check loans that they repay with their next paycheck.

This keeps them out of financial trouble without having to sacrifice on holiday gift-giving. With cheap loans difficult to qualify for, the need to have sufficient cash or a convenient financing solution increases.

Redundancies and other financial issues have left many UK consumers with poor credit scores. These individuals may not even qualify for a credit card or loans bank provided. Their best bet is to begin saving for holiday expenses now. If they have not saved enough by the holiday shopping season, they may need to use one or more payday loans.

When using a loan to finance holiday purchases, it is important to repay the balance as soon as possible. The paycheck received after the holiday shopping spree should be applied toward the loan, as long as living expenses have already been covered.

This prevents a small loan from becoming a very expensive one due to additional interest and fees.

Just when you think you have seen it all, along comes BuyMyFace. The brainchild of two UK students in debt, this venture involves using human faces as advertising space. After realizing that they owed loans worth a combined $80,000, the two students set out to create a plan for repaying the money.

They launched their website in October 2011 and have been selling advertising space on their faces for hundreds of dollars per placement.

A company purchases advertising space on the face of one of the students. The student then paints the ad on his face, takes a picture, and posts it on the BuyMyFace website. Anyone who clicks on the ad is taken to the website of the advertiser. Initially, the students charged £1 per day for an ad.

According to The Sun, an advertisement now costs over $600. The students reported that they have made over $50,000 in just 180 days.

Students from all over the world have caught wind of the idea and contacted the company, saying they would like to use their faces to sell advertising. So many students seemed to be saddled with loans debt that the founders are exploring the idea of creating a franchise business within the next two months.

This idea may sound outlandish but many people will go to great lengths to consolidate or repay debts.

Included in the more creative approaches to debt repayment is turning the home into a giant billboard. This idea has begun taking off in the U.S., where some homeowners are repainting their houses and hanging billboards on the exterior. One family in the Los Angeles suburbs is having their mortgage paid by the advertiser in exchange for their promotional efforts.

Homes do not need to be on busy streets to qualify and one company in the industry claims to have received applications from as far away as Japan and Russia.

UK residents need not go to such extremes to repay their debts. If they are only slightly behind with expenses, payday loans may be the solution. These are short-term, no credit check loans, which makes them perfect for people with low credit scores or those who need money until the next paycheck.

If they repay the loan within its initial term, borrowers limit their interest payment and are back to being debt-free.

More consumers are having trouble getting approved for loans bank offered, making alternative financing like this an attractive option. Though the loans APR is usually much higher, burdensome documentation is not required. Many payday lenders offer an online application that takes only minutes to complete and they provide an immediate decision.

Payday loans are also ideal for people who need cash quickly. Many lenders fund their loans as quickly as they approve them, directly depositing the money into a designated bank account. Once the money clears the bank, the borrower can use it to pay bills, cover last-minute expenses, or purchase necessities.

The fact that they need not paint their face or their home is a welcome situation.

According to a report released by the British Bankers’ Association (BBA) on Friday, UK overdraft, credit card, and personal loan repayments have surpassed new borrowing.

For more than one year, UK consumers have been repaying these debts at the fastest rate, resulting in a £305 million net repayment, the highest figure since January 2011. Some consumers are reducing their interest payments by using cheap loans to consolidate and repay outstanding debts.

Credit card repayments during this period were £7.3 billion, exceeding the £7 million credit card spending figure. David Dooks, statistics director for BBA, reported that consumers and businesses are continuing their cautious approach to finances due to the fragile economy.

This is evidenced by the move to repay bank financing and hesitance to take on additional credit. Mr. Dooks noted that corporate and consumer confidence will soon be boosted by government programs.

According to experts, many UK consumers are using a personal loan to consolidate debt. This simplifies repayments and saves them money over the long-term. Consumers with a small amount of debt can use short-term, no credit check loans to repay their outstanding balances and overdrafts.

They should comparison shop for these to find the best loans APR and most convenient repayment terms. Though this financing is more expensive than loans bank offered, it is also much easier to obtain.

Websites that help consumers compare these payday loans and other types of financing provide a valuable service. They eliminate the need for people to visit each lender site to view its offerings.

Instead, loans offered by multiple lenders are displayed side-by-side on a single page. This makes it much easier to compare different aspects of the financing. Consumers can quickly identify the loans cheapest for them and can click to learn more or visit the lender website.

The economy in the UK is still very unstable, making it important for residents to exercise sound financial judgment. If their bills begin piling up, they should look for ways to reduce expenses or increase income.

If this is not possible, a low interest loan may be an acceptable way to repay high-interest balances on credit and store card accounts. Consumers can find and apply for a loan online in minutes and their bank account will be funded almost as quickly. They can use the cash to pay bills, pay off credit card balances, and cover emergency expenses.

There is no word when the UK economy will improve but recently increased mortgage costs indicate that it may not be any time soon.

Consumers are taking steps to keep themselves from falling deeper in debt. Unfortunately, unforeseen expenses can make this impossible. Thankfully, there is financing available that does not require a credit check and features almost instant approval.

When the time comes to consolidate debt or get additional financing, UK consumers should look no further than their computer. Loans bank provided have become extremely difficult to get due to strict lending criteria.

Payday loans and other non-traditional financing are there to fill the gap when consumers need money.

Not everyone suffers when the economy takes a turn for the worse. In Britain, the payday lending industry benefitted greatly from the financial crisis that began four years ago.

Payday loans are short-term financing for small amounts of money that carry a high rate of interest. When banks say no, more Brits are turning to this financing to pay bills and fund holidays.

Payday loans are usually for less than £1,000 and feature a term no longer than one month. With these loans, APR can be a very scary figure.

It is quite large, sometimes reaching 4,000 percent or more, because this financing is not intended to last for a few months, let alone a year.

Wonga reports a typical loans APR of 4,214 percent. Rivals include QuickQuid, The Money Shop, Payday UK, and Quicksilver, each of which also offers rates much higher than loans bank provided.

When the traditional consumer credit market contracted, payday lenders stepped into the vacancy. As the economy continued its downward spiral and living expenses increased, business began booming for the payday lending industry.

Storefronts popped up on notable high streets in Britain and ads from payday lenders appeared on radio, television, and public transportation. These no credit check loans are promoted to cover everything from travel expenses to visit a dying relative to lavish vacations.

Consumer Focus, a watchdog group, estimated that the number of Brits using a payday loan quadrupled between 2006 and 2009, which saw 1.2 million Brits borrowing a total of £1.2 billion.

One analyst firm reported that by 2010, the amount of payday borrowing had reached £1.7 billion. This January, the housing charity Shelter reported that nearly one million people had used a payday loan to help cover mortgage or rent expenses within the previous year.

In Britain, payday lending is less regulated than it is elsewhere. However, the Office of Fair Trading (OFT) set out to address this in February, launching a comprehensive review of the industry due to concerns that financially troubled Brits were being exploited by some unscrupulous payday lenders.

With a mission to enforce consumer protection regulations, the OFT has already taken steps against some payday lenders found to be in violation of established guidelines.

Payday lenders promote their services as being smart alternatives to unauthorized overdrafts and illegal loan sharks. According to Consumer Finance Association Chief Executive John Lamidey, hundreds of thousands of people have successfully used payday financing.

Mr. Lamidey said that payday lenders who are not members of the industry body are causing problems for the sector and he believes they will either be purchased or go out of business.

Mr. Lamidey pointed to the ease and simplicity of obtaining payday loans and noted that consumers do not want to be saddled with long-term debt.

Though Consumer Focus reported that nearly 30 percent of loans are not repaid as scheduled, Wonga has reportedly reduced its non-repayment rate to seven percent using a credit risk algorithm.

The lender also claims that it discourages repeated borrowing and enforces a cap on automatic extensions.

UK banks may soon be creating a stir with customers who are credit card holders. Virgin Money recently increased its interest rates by 50 percent on credit cards held by more than 15,000 customers.

The bank seems to have forgotten its recent commitment to “provide value to customers,” instead issuing an interest rate ultimatum to thousands of credit card holders. More banks are expected to follow suit to make extra profit while the Bank Rate is low.

According to Andrew Hagger with Moneynet, deposits are becoming more expensive for lenders. Leading building societies and banks recently increased mortgage rates and Mr. Hagger expects that more increases are forthcoming.

MBNA manages Virgin credit cards and a Virgin spokesperson stated that MBNA determined the criteria regarding which customers would receive the interest rate increase.

Customers can either accept the Virgin rate increase or reject it and cancel their card. However, many may not have anywhere to go. Kevin Mountford with Moneysupermarket commented that customers with less than excellent credit are usually those affected by these changes.

New credit card applicants are already facing record high interest rates. In March 2009, their average rate was 15.7 percent, according to Moneysupermarket data. By late February 2012, this figure had increased to 17.3 percent.

The recently affected Virgin Money credit card holders will see their purchase interest rate increase from 16.8 to 24.9 percent and their balance transfer rate will increase from 18.9 to 27.9 percent.

Mr. Mountford said that companies increase rates for customers whose transactional history indicates financial stress. According to Mr. Hagger, merely taking more cash withdrawals than normal can cause someone to be labeled as a risk.

Customers who reject the rate will not be permitted to spend more on their card but they can keep their existing interest rate until they repay their balance.

Mr. Hagger reported that customers with excellent credit could find much better deals, including cards with a limited time, zero percent balance transfer or purchase feature.

However, Mr. Mountford suspected that a “very low percentage” of people would qualify for these offers.

It is becoming more difficult for many UK citizens to get a new credit card. Vanquis Bank caters to customers with poor credit and recently indicated that only 18 percent of its applicants are approved.

PricewaterhouseCoopers (PwC) partner Simon Westcott said that restricted mainstream lending has caused many consumers to resort to payday loans.

These loans APR are still higher than those for many credit cards but the gap is narrowing. PwC discovered that in 2011, the number of circulating credit cards plummeted by one million.

Consumers who do not qualify for loans bank offered and are seeing their credit card interest rates skyrocket should check their Callcredit, Equifax, and Experian credit files.

If errors or omissions are discovered, they should have these corrected immediately. No credit check loans are available for consumers engaged in rebuilding their credit score to an acceptable level.

These can be used to consolidate debt, pay emergency expenses, or make up for temporary shortfalls in income.

In a recent report, MPs referred to Britain as the “wild west” for payday lenders. These politicians claim that the high loans APR has caused millions of Brits to fall further into debt. Many residents are facing the loss of their homes, the MPs said, and action must be taken.

These no credit check loans provide a small sum of money over the short-term.

Based on the description, these loans do not sound harmful in and of themselves. If they are repaid within the initial term, they usually are not. Financial problems stem from payday loans being rolled over rather than repaid. APRs as high as 16,000 percent make this an expensive practice that leads some people into financial ruin.

This rate is not outrageous for a loan repaid in few weeks to a month. However, if the loan is rolled over several times, interest charges may exceed the principal.

The Business, Innovation, and Skills Committee reported that in Britain, there has been a “rapid proliferation” of payday lenders. While speaking to the MPs serving on the committee, a personal finance expert called Britain “the wild west for payday lenders,” adding that these companies view the country as “a crock of gold at the end of the rainbow.” Though many providers of no credit check loans are reputable and do not take this point of view, there are some that do.

Committee chairman and Labor MP Adrian Bailey recently said the industry was not sufficiently regulated. He and the other MPs on the committee heard numerous stories of the negative impact this financing has had on Brits. Payday lender Payplan managing director John Fairhurst claims to have seen some cases where a person had more than 20 payday loans at one time.

He informed the MPS that the typical deficit for customers of his company is approximately £800 per month. Customers who repeatedly use a short-term loan to cover the shortage should not have access to credit for this purpose.

The committee report explains that the payday lending industry has grown rapidly during recent years. There were 300,000 people using payday loans in 2006, 1.2 million in 2009, and 1.9 million by 2010. Many Brits are attempting to get by on limited funds, with 3.5 million of them considering using a payday loan during the next six months, according to R3, an insolvency trade body.

Research conducted by the committee revealed that 60 percent of payday lending customers regretted their decision to take a loan. Money Advice Trust, a British debt advisory firm, reported receiving 200 payday-lending related calls per month during 2011.

According to the report, the firm now receives more than 1,000 of these calls each month.

Mr. Bailey stated that during difficult financial times like the present, more Brits are using payday loans to get by financially. More are also turning to consumer debt management services. These two trends make it important to increase regulation of the industry, he said.

The Office of Fair Trading is responsible for this regulation and is currently investigating the market.

Payday loans are designed to help consumers, not hurt them. Unfortunately, more people seem to be getting themselves into deeper financial trouble with these loans each year. According to the UK Consumer Credit Counseling Service (CCCS), there was a huge increase in the number of payday loan-related calls it received last year.

The combination of high loans APR and consumer inability to repay the financing on time seems to be creating a financially harmful result.

In 2010, CCCS received 7,841 calls from consumers regarding short-term, no credit check loans. This figure skyrocketed to 17,414 in 2011 but that is not the most concerning data. The CCCS reported experiencing a six-fold increase in customers who had payday loan debts.

Though this financing is relatively small, it seems to be making a large impact on consumer budgets. Rather than helping many consumers remain financially stable, it is pushing them into debt.

Payday lenders charge annual interest rates as high as 4,000 percent. If the loan is repaid within the initial term, the amount of interest paid is only a fraction of this. For various reasons, many consumers are finding themselves unable to repay this financing as agreed and must roll over the loan or take out another loan to repay the first one.

Debt begins to accumulate and before they know it, many consumers are in over their heads.

Last week, MPs on the Business, Innovation, and Skills Committee presented a report that criticized payday lenders and requested timely action by the government. Stricter lending rules were called for to prevent these lenders from “abusing” consumers considered the most vulnerable in UK society.

These consumers do not qualify for loans bank provided and are facing dire financial emergencies, making them easy targets for unscrupulous lenders.

According to CCCS, 13 percent of individuals contacting the organization during 2011 had payday lending-related issues. The 2009 figure was 2.6 percent and by 2010, it had more than doubled to 5.5 percent. The average payday lending debt the charity handled during 2011 was £1,267. CCCS stated that this relatively new industry is fraught with “accounts of malpractice” and it recommended additional scrutiny of the sector.

Though this financing meets the needs of some clients, the charity said, it called for reigning in as necessary and the creation of customer-oriented standards.

Payday lenders continue to defend the products they provide, saying that loans APR is a misleading figure for financing provided for only a few weeks. Last week, lenders supported the recommendation of the select committee that APRs be replaced by a figure representing total cost of credit.

A spokesperson for mega payday lender Wonga stated that not only is APR the wrong measure, many consumers find it confusing.

Reputable payday lenders state that consumers want to know their actual loan costs. Those like Wonga are requesting that other providers of no credit check loans offer transparent pricing upfront, eliminating consumer questions regarding interest and fees.

The CCCS will continue to provide debt advice to consumers with payday lending issues.

Payday loans APR are known for being quite high, with many lenders offering rates of thousands of percent. This makes it important for prospective borrowers to comparison shop for the best deal. With so many people in financial distress and trying to save money, one would think that they would make every effort to find cheap loans.

Not true, reports a leading UK lender, who is trying to change this for the better.

InstantLoansDirect surveyed its customers and discovered something quite shocking. Most people applying for payday loans said they used the first lender that accepted their application, with no regard for the financing costs. The findings disappointed this company, which is trying hard to make short-term lending affordable to British borrowers.

InstantLoansDirect is a Harvey and Thompson PLC partner and has been in business for over a century. It offers loans APR approximately 90 percent lower than Wonga and many other well-known payday lenders.

InstantLoansDirect is a new provider of payday loans, entering the market last year. Its ongoing goal has been to offer the lowest loans APR compared to major payday lenders like Wonga. Company representatives were eager to learn how customers selected their loan.

Company founder Giles Coutts noted that many people mistakenly assume that all payday lenders are “legal loan sharks” or are only in business to “make a quick buck.” His company offers an APR of just 448.3 percent, much less than competitor APRs that far exceed 1,000 percent.

Mr. Coutts believes that payday loan interest rates will be driven down by market forces, not interference from the government. He advises consumers to become educated regarding this short-term financing and encourages them to shop around for a loan rather than taking the first offer that comes along.

InstantLoansDirect provides a loan comparison table on its website. The information is updated daily so customers can make the most informed decision.

Loan providers with the largest marketing budgets often get the most attention. This leads many consumers to borrow from Quick Quid and Wonga. Mr. Coutts stated that based on the interest rates they charge, these lenders can afford to spend more on promotion.

All the while, smaller-budget lenders like his company are offering much lower rates. The message needs to spread that shopping around is a good idea when it comes to this financing, he said.

By getting the lowest interest rate, borrowers decrease the amount they must repay. With short-term financing like this, that can substantially lower repayments. These loans are designed to be repaid within 30 days so any way to reduce the amount due is helpful to a financially restricted borrower.

The extra time spent comparing offers is justified by the cost savings.

Labor MP Stella Creasy is one of several politicians who have criticized the payday lending industry for high APRs. Looking at the rates charged by many major lenders, one would tend to agree with her.

However, there are also lenders that charge much lower interest rates for short-term loans that provide immediate financial relief.

The Office of Fair Trading (OFT) has stripped one of the largest UK loan brokers of its credit license. Yes Loans is no longer permitted to sell loans following the discovery that it engaged in “deceitful and oppressive” practices. OFT representative David Fisher stated that the agency will continue to take action against businesses that treat consumers, particularly those considered most vulnerable, unfairly.

Portions of the credit industry in general were recently criticized by a committee of MPs as being “opaque and poorly regulated.”

Based in South Wales, Yes Loans is a credit broker, a company that matches consumers looking for loans with organizations that provide unsecured financing. The company has been under investigation by the OFT for a while and the agency found that it was engaging in misleading practices.

Some prospective borrowers were led to believe that the company was a lender, not a credit broker. These individuals were asked to supply credit or debit card details supposedly required for identity verification.

With the card information in hand, the company charged fees against the credit or debit accounts without consent of the account holder. Yes Loans never clarified that a fee would be due and it was not timely with refund issuance. Instead of being matched with the desired loan, some customers were provided payday loans with high interest rates.

Following the 2009 OFT investigation, Yes Loans revised some business practices including no longer charging fees up front. This did not prove enough for the OFT. The regulator stated that the prolonged period of oppressive and deceitful business practices and the continued employment of some members of leadership made Yes Loans “unfit to hold a consumer credit license.”

In addition to Yes Loans, Money Worries Limited and Blue Sky Personal Finance Limited, two associated businesses, had their credit licenses revoked.

The affected businesses now have 28 days to file an appeal of the OFT decision. Yes Loans alone reportedly processed more than 50,000 applications for personal loans each month. In exchange for matching customers with unsecured loans ranging from £250 to £25,000, Yes Loans charged an arrangement fee of about £69.50.

The Financial Ombudsman Service conducted formal investigations of 133 complaints regarding Yes Loans in 2011. Between June and December 2011, 83 percent of complaints were decided in favor of the customer.

Mr. Fisher explained that “belatedly” changing its business practices due to possible OFT enforcement action does not necessarily qualify a company to retain its credit license. The watchdog found that Yes Loans used “high pressure” tactics when asking customers to provide credit and debit card details.

This and its other unfair business practices are violations of the Consumer Credit Act 1974 and additional regulations.

Directors for Yes Loans and the other two affected businesses claim that they made “significant and fundamental advancements” following the OFT investigation. They are currently seeking guidance on appealing the watchdog’s decision. Wales Online reports that the businesses are currently permitted to trade because their credit licenses are valid during the appeal process.

Intrigued by advertisements from UK payday lender Wonga, The Guardian recently explored the popular payday lender. The corporate culture of Wonga is nothing less than cheerful. Radio and television ads feature dancing puppets and approved borrowers receive upbeat email messages filled with exclamation points.

These include a note indicating that funding is in process and a thank you message when a repayment is received.

Everyone at Wonga seems to be all smiles and they have good reason to be, as business is booming. The company was established just four years ago and in this brief period, it has issued about 3.5 million short-term loans online. Average loan amount is £260 and the maximum loan for a first time customer is £1,000, with a maximum initial loan term of 30 days.

Wonga spent major advertising dollars to achieve its success, increasing its spending from about £22,000 to £16 million between 2009 and 2011. London buses promote the brand, as do the Heart of Midlothian and Blackpool football teams.

Wonga attributes its success to fast, technologically-driven service that was not available before it entered the industry. The customer base is described as Internet-savvy, expecting immediate gratification, and ostracized from loans bank offered. Customers can use a smartphone to apply for a loan and they usually receive the money within minutes of approval.

Not everyone is smiling about these payday loans. Critics say Wonga offers expensive credit to consumers who are unable to get cheap loans through conventional avenues. The most outspoken campaigners call these no credit check loans “immoral and unjust” and refer to the lenders as “legal loan sharks.”

Wonga promotes transparency in its ads but is not quick to reveal its 4,214 percent representative APR.

This is not the only difference in perspective between Wonga and some outside the company. The average customer is portrayed as a young professional with a regular income and access to conventional credit. According to Wonga customer surveys, 95 percent of these individuals are “satisfied” with services they receive.

MPS and debt counselors beg to differ, saying that payday loans are creating financial difficulties for an increasing number of already financially vulnerable consumers. According to Citizens Advice, the number of people with issues related to payday loans has quadrupled in two years.

Through its advertising, Wonga tries to set itself apart from the competition. It does not anticipate being driven out of the market through the ongoing Office of Fair Trading payday lending industry investigation. Wonga head of marketing Darryl Bowman stated that, “Wonga are the good guys.”

The company provided The Guardian with customers that attest to this, though there are other customers who were not as pleased.

There is no doubt that services provided by Wonga and other payday lenders are convenient. Consumers can get cash quickly and easily any time of day. No justification or need to fax supporting documents, no requirement to talk to anyone at the company.

Wonga considers its services more like bank overdrafts than payday loans. According to Mr. Bowman, the company is an Internet technology business, with financing its secondary focus.

UK Ministers have warned that a crackdown on ads for payday loans may be coming. This will affect many credit companies offering short-term, no credit check loans with high loans APR, including Wonga. In 2011, Wonga held the distinction of spending the most on above-the-line advertising, in which the ad agency takes a commission for ads broadcast to mass audiences through mediums like television and radio.

MPs from all parties are placing more pressure on the payday lending industry, accusing it of running advertisements targeting the most vulnerable groups in the population including individuals on benefits. Politicians also believe that some payday lenders offer money before ensuring that the borrower can repay it.

As a result, many borrowers must roll over their loans, amassing large amounts of debt. As the financial situation of many UK households worsens, more people are turning to these no credit check loans and while some find relief, others experience a new set of financial woes.

The Department for Business, Innovation, and Skills plans to study the findings of an ongoing Office of Fair Trading (OFT) investigation. It will then determine its next moves, which government sources report will likely include reigning in payday lending advertisements.

If payday lenders do not do this voluntarily, they may be forced to do so through legislation. Not all lenders will find themselves in the hot seat but some of the most recognizable names will be affected.

The OFT recently reviewed more than 50 UK payday lending websites from the perspectives of advertising and relay of information. Following this investigation, the organization wrote to seven trade bodies requesting an improvement in advertising standards.

Consumer Affairs Minister Norman Lamb said that Ministers are eagerly awaiting the review findings. This information will be used to improve industry standards and take additional enforcement action.

While ministers strive to create a transparent payday lending market and improve protection for UK consumers, payday lenders are spending substantial money on advertising. Right behind Wonga in terms of above-the-line advertising spending during 2011 was Quickquid.

These lenders and many others are building upon industry growth to capture even more customers. In 2010, the industry skyrocketed to an estimated £1.9 billion.

Labor MP Yvonne Fovargue is chair of an all-party group focusing on debt. She recently tabled a bill that would make payday lenders include free debt advice in their advertisements. The OFT has already taken action to prevent misleading payday lending ads created to look like free debt advice from charities.

Consumers following the advice in these ads might take out no credit check loans thinking they were the recommended method of handling debt, when in fact they are costly and may be ineffective.

The OFT is continuing its investigation into the payday lending industry by visiting dozens of brick-and-mortar lenders to study their practices. Reputable lenders welcome this because they have nothing to hide. It is the less scrupulous providers that may find themselves on the other end of a request to change their practices or surrender their operating license.

The Co-operative Bank recently released some very disturbing research findings regarding UK consumer debt. Approximately 70 percent of UK adults said they had debt problems, many finding themselves in this situation for at least five years.

Even more alarming is the fact that a lot of them do not recognize the issue until it has become unmanageable.

Study findings indicated that UK consumers accumulate an average debt of £1,247 before they acknowledge there is a problem. According to the Co-operative, these consumers are afflicted with “DRIP syndrome.” They deny that they have accumulated debt, rationalize the reasons for the situation, ignore the issue, and postpone getting financial affairs in order.

Almost ten percent of those surveyed said they have turned to the lottery or gambling in an attempt to eliminate their debt. Others are using payday loans because this short-term financing helps them stay afloat by providing cash quickly.

Unfortunately, some borrowers are unable to repay the loans and roll them over, amassing more debt.

“Debtpression,” characterized by tense feelings, sleepless nights, mood swings, and low self-esteem, afflicts many UK consumers in debt. Experts say that ignoring debt will most likely make the situation worse. By confronting issues now, consumers can begin improving their financial situation and reduce the physical effects of money problems.

Debt issues do not usually go away on their own and gambling or lottery participation can worsen, not help, the situation.

Robin Taylor, The Co-operative’s head of banking, commented that creating a budget and diligently managing the bank account will help consumers get a handle on their finances. The Co-operative website is just one place where consumers can find a budget calculator and financial management advice.

While payday loans may resolve small, one-time debt issues, a more structured approach may be needed for persistent financial problems.

In a recent study, MoneySupermarket found that savings habits of UK residents have changed drastically during the past year. One-half of respondents to the survey indicated that they had reduced or stopped saving money. They are doing so for many reasons, most of which pertain to financial burdens placed upon them by the struggling economy.

Experts worry that this trend could become more commonplace in the near future, a sign of more bad things to come.

Approximately 47 percent of Brits have reduced the amount of money they save. About 12 million, or 52 percent, are doing this so they can pay daily living expenses. Eighteen percent are reducing savings so they can clear credit card and loans debt.

Some consolidate unsecured debts into one of the cheap loans that lower their interest payments. Others repay their debts individually, starting with those that have the highest interest rate.

Reduced income was listed as the reason that more than one-third of respondents can no longer save money. While this is understandable, the fact that an additional 19 percent claimed that they never saved is shocking. Without a financial cushion, consumers may find themselves in bad shape if unexpected expenses arise.

There may not be time to secure a bank loan, so these individuals resort to payday loans to cover short-term emergency needs for cash.

When asked where they had reduced or eliminated spending during the past year, most people said dining out. Going on holiday and buying new clothing were other popular responses. Some people even went so far as to reduce the frequency of haircuts or give up alcohol.

These responses indicate that many UK residents are taking their financial situation seriously and doing whatever they can to make ends meet. Though savings may not take top priority, consumers are limiting their spending to avoid getting into debt.

Kevin Mountford, MoneySupermarket head of banking, does not find the survey results surprising. He pointed to the current low interest rates and high cost of living as contributors to the reduction in savings. Though many people must cut back or eliminate saving in exchange for covering living expenses, he drew attention to a positive trend, calling consumer reduction in luxury spending “encouraging.”

This prioritization of finances shows that many consumers are dedicated to keeping themselves out of debt.

Mr. Mountford had a special message for those UK residents who are not saving at all. He urged these individuals to begin saving, even if they can only afford to put away a money in small increments. A few pounds saved each week will add up over time.

This money can be used to pay unexpected expenses or saved for retirement.

People should not be discouraged by low interest rates when saving their cash. Numerous investment options are available that offer higher returns and provide access to funds whenever needed. Consumers should take steps now to create a stable financial foundation.

Those with poor credit should improve their scores using tools like no credit check loans that report to credit bureaus.

For many UK consumers with loans, debt has become an unpleasant fact. Households report using one-quarter of their income to repay interest on their debts, according to the Consumer Credit Counseling Service (CCCS). The average household pays nearly £200 per month for interest alone.

When this is combined with high inflation, soaring fuel costs, and pay freezes, the financial situation becomes even more difficult.

To ease the discomfort, many people are taking steps to consolidate their debts. According to the CCCS, there has been a sharp increase in requests for debt advice from working professionals ages 45 to 59. In 2005, this age group represented 22.8 percent of CCCS customers.

By the conclusion of 2011, the number had increased to 31.7 percent, according to a CCCS report. Also included in this document was a prediction that debt advice demands would peak in 2014.

Many consumers are struggling to stretch their disposable income to cover their expenses. On Sunday, diesel fuel prices reached a record £1.50 per liter. Housing and utilities costs are also on the rise. Many people turn to cheap loans, while those with credit issues take no credit check loans, each featuring an interest component.

Making these interest payments is proving difficult for some UK borrowers. Reasons include the main breadwinner losing a job and sources of other income being depleted. As the unemployment rate increases, loans APR are expected to remain low.

In the early stages of the financial crisis, many UK households amassed loans debt, leading to an increase in pounds per disposable income spent to service debts.

CCCS reported that the proportion of discretionary income used for interest payments should remain stable during upcoming months. At the same time, debt levels are expected to continue their decline, according to CCCS chairman Lord Stevenson.

The majority of individuals seeking debt counseling are from North Wales and London.

It has been discussed for a while and it is finally happening. The Office of Fair Trading (OFT) recently launched its review of the UK payday lending sector. This investigation was spurred by widespread concerns that some less than scrupulous lenders are taking advantage of customers.

No credit check loans are designed to help people out of difficult financial situations, not increase their money problems.

The recent economic crisis has made it difficult to qualify for loans bank offered. This has driven more people to payday loans, short-term financing designed to be repaid with the next paycheck. These are not cheap loans, as APRs reach into the thousands.

In response to criticism that these rates take advantage of desperate consumers, the OFT will visit 50 major payday lending companies and conduct  on-site investigations.

The watchdog aims to find out whether lenders are approving financing without first verifying that borrowers can afford to repay it. Other concerns to be investigated are whether particular segments of the population are being targeted and how frequently loan rollovers are occurring. Rolling over a payday loan causes additional interest and other charges to accrue.

The OFT will also find out whether borrowers who wind up in financial trouble are subjected to fair treatment.

An initial phase of the investigation, now completed, involved a review of more than 50 payday lending websites. The OFT prepared its findings and presented these to the main trade agencies in writing, noting that several improvements in advertising standards were warranted.

This next phase involves determining whether the lenders are complying with irresponsible lending guidance and the Consumer Credit Act. The results of the investigations will be used to refine industry standards and deter companies that do not meet consumer credit license requirements.

OFT consumer credit director David views any shortcomings on the part of these lenders as unacceptable and he indicated that the OFT is prepared to address these in words as well as action. In addition to collaborating with trade bodies to improve standards, the OFT will “not hesitate to take enforcement action,” he said. This includes revoking lender operating licenses, if warranted.

Until now, the OFT has taken the stance that payday loans APR should not be restricted. In 2010, the group determined that this financing was useful to UK consumers where were unable to find another legitimate lending source. The lenders fill a gap that left exposed, could force these individuals to borrow money illegally from loan sharks.

Due to reports of aggressive behavior by payday lenders, the OFT may now be changing its position regarding this industry.

Following  the 2010 OFT high cost credit review, licenses were surrendered by 43 companies and an additional 13 were subjected to action that ensured their credit licenses would be withdrawn. Results from the upcoming investigation are scheduled to be published later this year.

Mr. Fisher noted that growth in the payday lending sector since 2010 and the current difficult economy make this the opportune time to review the industry and increase protection for UK consumers.

Several years after the recession, many British consumers are still experiencing financial problems. Credit cards and loans are two basic types of financing but credit card use has declined significantly during the past year, according to a study by PricewaterhouseCoopers.

Payday loans have become popular alternatives because they are easy to get and are funded quickly.

These no credit check loans are perfect for short-term use, easily covering unexpected utility expenses, car repairs, and even medical bills. Whether they are suitable for long-term money management requires a different perspective. Some experts advise against the regular use of loans but this financing can sometimes put families on more solid financial ground.

The consensus regarding credit cards is that they encourage people to spend money they do not have. As a result, many cardholders amass huge debts and must make regular repayments that include expensive interest charges. A loan is one-time financing, which makes it difficult to repeatedly overspend, and it features a simplified repayment schedule.

Some no credit check loans feature longer repayment periods than a few weeks or a month. This lowers the monthly payment amount and the loans APR is sometimes cheaper than credit card interest rates, decreasing the overall amount to be repaid.

Based on these features, payday loans can be suitable for longer-term financial needs.

Many factors have led to the personal financial crisis that many Brits are experiencing. Expenses are rising because general prices have increased. At the same time, wages are stagnating, with 15 percent of workers not receiving a pay raise within the past three years.

As consumers struggle to stretch their paychecks further, loans can help fill the financial gap. This financing is available to meet short, medium, and long-term needs and many consumers are now using loans instead of their credit cards.

Payday loans are popular in the UK, which has led to increased media coverage. Unfortunately, not all of this publicity is positive. Even the UK government has made its thoughts public, saying that additional industry regulation is required.

Issues pertain to the customer base, which includes many low-income consumers, as well as the loans APR, which is usually much higher than the rate for a bank loan. What many consumers do not realize is that payday lenders are already regulating themselves.

Not every person who visits a payday lending website or store will receive one of these no credit check loans. UK payday lenders use background checks and other verifications to determine whether an individual qualifies for a loan. Some even contact credit reference agencies to discover the credit standing of each applicant.

Many providers will not issue a loan to a consumer who has another loan outstanding.

Most payday lenders require that a customer be a UK resident over 18 years old. The individual also needs to be employed full-time in a job that provides a regular and relatively consistent amount of income. In some cases, the applicant may be required to provide one or more references who can verify the character and financial status of the individual.

If a loan is approved, the amount of money lent is often based on the income of the borrower. Lenders do not want to extend more financing than borrowers can afford to repay.

Simple Payday is just one of the many online UK payday lenders. The company reportedly receives hundreds of applications each day. However, it only approves between two and five percent of applicants. The industry standard approval rate for payday loans in the UK is approximately four percent.

These statistics are often not relayed to the public by the media. Many consumers think that anyone with a pulse will qualify for these no credit check loans.

Since most applicants are denied this financing, the question becomes why do so many borrowers fail to repay their loans. Unforeseen situations like job loss or illness sometimes come into play. The short repayment period, often no more than one month, works against some borrowers.

Though these individuals have all intentions of repaying the money, an unexpected expense like a high utility bill can prevent them from doing so.

With any type of financing, the lender takes on a certain level of risk. With payday loans, the risk seems to be higher. Many borrowers are already in a financial bind, which is what leads them to take this loan. If they do not manage their money wisely, they may find themselves having to roll the loan to another term.

Some borrowers only see their immediate financial need and fail to consider the loan repayment date. When this happens, they must accept responsibility for failing to repay the loan. The lender is not at fault in this situation. The instant nature of payday lending is what makes it so popular and also so dangerous.

Payday lending has existed for several years but has recently become more popular due to television advertising and other promotions. Fallout from the 2007 recession has made it difficult for many consumers, especially those with poor credit, to obtain financing.

Payday lending is a quick and easy alternative to loans bank provided. The process does not involve a credit check or loads of documents. In many cases, it can be completed entirely online.

Getting a loan from a bank can take weeks or even months. Many UK households need cash quickly to address short-term financial gaps. Payday loans offer fast access to small amounts of money that are repaid on the following payday. Some lenders instantly approve loans and provide funds within minutes via direct deposit to a bank account.

No credit check loans are attractive to consumers whose credit rating has taken a beating in recent years.

Loan terms typically range from one week to 30 days and the amount is capped at around £1,000 to £1,500. A bank loan does not usually feature these terms because it can take 30 days just to fund a loan and banks often do not deal with small financing.

Payday loans APR, or Annual Percentage Rate, is usually much higher than the APR for a bank loan.

Reasons for this include the risk represented by poor credit borrowers, the shorter term, and smaller loan amount.

APR is based on a 12-month period so when it is applied to short-term borrowing, it appears very high. Prospective payday lending customers should calculate their actual interest payment to determine whether the rate is reasonable, from their perspective.

They should use this information to compare different no credit check loans to find the best deal. Reputable lenders clearly display their loans APR on their website and provide examples of repayments based on different amounts borrowed.

There may be other charges associated with this financing and consumers should understand each of them. Experts caution against taking out more than one payday loan at a time. This financing should only be used for essential reasons like emergency expenses, not to purchase luxury items like jewelry or designer clothing.

When completing a payday loan application, the individual should be honest regarding income and employment. This information is used to determine the maximum amount that can be borrowed without contributing to long-term financial issues. If consumers believe they will have difficulty repaying the loan, they should not proceed with the transaction.

Family or friends may be willing to loan the money with more flexible repayment terms.

Before signing a loan agreement, the borrower should review the document and make sure the repayment amount and payment due dates are correct. It may be possible to defer or rollover a payday loan but this should be avoided because it incurs additional charges.

Borrowers should deal directly with a reputable lender or a broker who has relationships with a group of responsible lenders. Complaints should be directed to the lender and if resolution does not result, reported to the Financial Ombudsman Service.

British micro-firms are companies that employ fewer than ten people. Managers of more than one-quarter of them believe their company will fold by 2015. One in six worries their company will close by the end of this year. With millions of these small businesses predicted to close, the British economy will suffer.

These alarming statistics were revealed in a survey of 1,000 UK firms conducted by YouGov. More than one-third of micro-firm owners said it has been more difficult to fund their business during the past year. This, coupled with the difficult economic climate, has led many to the brink of closing.

The bank account of one in every five is empty.

In the UK, more than nine in ten companies are considered micro-firms. In a report prepared for Capital One finance company, Warwick Business School Professor Francis Greene called micro-firms “the bedrock of British business” and said that those with no money in the bank are extremely vulnerable to collapse because they do not have a “safety net.”

Despite this, only two percent plan to apply for loans bank offered this year.

Based on the statistics revealed by YouGov, approximately 1.6 million UK citizens are at risk of career collapse. Even knowing this, micro-firm business owners are relying on credit cards, financial support from friends and family, and personal savings instead of a loan.

Forum of Private Business member Phil McCabe states that firms need cheap loans but are not confident in banks, which must do a better job of lending.

The latest small firm lending plan proposed by Chancellor George Osborne recently suffered a setback. HSBC and Barclays believe they would incur losses if they participated because they can raise funds more inexpensively on money markets than through government borrowing.

When micro-firm owners run out of savings, they may resort to payday loans rather than bank financing.

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.