One large lender in the United Kingdom who is known for being the worst pay day loan lender based on the way they treat their customers contributed to one of the pay day loan cycles that financially crippled many people throughout the years.
While some customers of a lender must take responsibility for their actions during the period of loaning, sometimes it can be more difficult to pay an original loan than first expected. This is especially true in the case of those who have met unexpected expenses that they needed to pay off in a short time.
Sometimes customers may experience a bereavement or another problem that could cause a sudden expenditure in their financial lives. With this, they will need to spend some of the pay day loan money that they had initially borrowed to pay for these expenses, or they would need to pay for it out of their pay check for that week or month. If the expenditure is necessary and they do not have a choice this can make things bad for the customer.
Pay day loan customers face these issues all the time. They will have taken a loan for a specific amount that needs to be paid back by a specific time which is usually a month, at maximum two months. Then, they will need to pay out for an unexpected expense they cannot afford. In turn, this will set their financial status into a terrible position. If you are a business loans uk customer, this is worrying.
The issue is that once the late repayment fee has first started, the fee is significantly raised. From there, it continues to go up daily rather than weekly or monthly. This can quickly turn a £150 loan into a £10,000 loan within the space of months like the famous case within the United Kingdom currently.
There is not enough regulation on the pay day loan market yet. Hopefully this will change soon.