Surviving the slump – how Brits are turning to short term loans
Everyone struggles with a financial issue from time to time, but the coronavirus pandemic has seen both the public and many businesses find themselves on very shaky ground. Despite the best efforts of the British government and their furlough, bounce back and business support schemes, firms have been closing their doors at a record rate whilst many of the working population have found themselves living on 80% of their usual salary at most.
Times are undoubtedly tough and with a prolonged period of economic uncertainty likely to come, the financial health of the nation (and indeed that of the global economy) is very much in the balance. Just as our approach to social interaction has changed with the COVID-19 pandemic, so too does it seem that our relationship with money has moved away from traditional ways of thinking. According to research supported by YouGov, a third of UK households have relied on short term credit to cover essential spending during lockdown – offering a prime illustration of the change afoot.
With the country emerging from its mandatory hibernation, the way that we all deal with money is changing. As even the most credit-adverse members of the public consider their borrowing options, how has the pandemic affected our finances, and what can we do to steady the ship?
A very British recession
As traditional centres of wealth suffer from closure and the imposition of strict measures from the government, it’s hard to predict a scenario in which the coronavirus pandemic does not directly cause some level of global economic turmoil. That being said, the Governor of the Bank of England, Andrew Bailey, has cast a more optimistic light on the future of the UK’s finances by suggesting that whilst the economic recovery from coronavirus will be long, the slump caused by the pandemic might not be so severe as originally feared.
For businesses, COVID-19 has made trading via physical premises almost impossible. The new approach to shopping is anything but normal and even service-based businesses have had to adjust their operations. In a similar vein, the public have also been forced to reassess their relationship with money. Unable to spend out as much, people have begun to realise that consumerism is not COVID-proof.
Whilst the way we deal with our finances may be changing, the fundamental parts of our day-to-day lives have continued – albeit at a slower pace. Cars still need insuring and running, bills need paying, people need clothing and mouths need feeding. Whilst coronavirus has changed our lives in many ways, it hasn’t brought an end to some of the most basic essentials – and these can be costly. It’s no wonder that short term loans have become such a staple of British economic activity.
What are short term loans?
In many ways, short term loans do what they say on the tin. Offering small to medium loans, over a fixed yet relatively short amount of time, they allow borrowers to get money when they need it and often without the rigamarole of a bank loan.
Unlike many traditional forms of lending (including the notorious ‘payday’ loans which usually required payment within just a month), short term lending offers borrowers a flexible way to access credit at a rate that is often lower than comparable borrowing via a credit card. With multiple repayment options extending between several months and several years, borrowers are able to secure finance that suits them.
Because of this flexibility, short term loans can help those who struggle to organise their finances by providing a clear route map to repayment over a term that is realistic for the individual borrower. What’s more, short term lenders are often much more willing to consider an applicant’s financial circumstances rather than just the generated number on their credit report. This means that even those with a history of bad credit stand a chance of getting a flexible short term loan, provided that their current situation is conducive to borrowing.
Flexible finance for trying times
Amidst fears of a second spike in coronavirus cases, it’s arguably more important than ever for us all to take a step back and look at how we handle our finances. Knowing about the credit options available is a sure-fire way to enhance financial literacy and only by taking an informed approach to managing money can you hope to handle a difficult situation well.
Short term loans have certainly gained traction during the coronavirus pandemic and have become one of the UK’s most popular solutions for unexpected costs. For those who are faced with an emergency spend or an unexpected bill, a short term loan could keep the wheels turning whilst allowing the borrower to pay back what they owe in a structured way. As a flexible and well-regarded form of borrowing, there’s no question that short term loans have the potential to help the public through the tough times to come
As with any form of credit, however, it’s important for the borrower to ensure that they find the best option for them. As a leading online loan broker, Little Loans works with a panel of direct lenders to help connect borrowers with the most appropriate short term loan for their circumstances. Unlike those who go directly to a single lender, borrowers who seek credit via Little Loans will be matched with the direct lender that is most likely to approve their application and so will not have to experience the arduous and often disheartening experience of making multiple approaches on different sites. As Little Loans is authorised and regulated by the Financial Conduct Authority (FCA), borrowers can take comfort from the fact that they are dealing with a reputable and trustworthy credit broker – an absolute must in today’s market.
With financial conditions taking a tumble across the world, there’s no denying that many of the British public are at risk of experiencing money worries in the near to mid-term. Whilst in the past this might have meant simply tightening belts and cutting spending, modern life is much more complex and there are some costs that are unavoidable. For times when these do crop up, a short term loan could be just the answer borrowers are looking for.
