UK consumers urged to steer clear of illegal lenders
The mountain of debt that UK consumers have found themselves in over recent years has resulted in many people missing repayments on financial commitments or being unable to afford their debts any longer, and this has invariably led to a higher number of consumers that have poor credit scores and histories. Those with a very bad credit history may find it impossible to get an unsecured loan, and it seems that non-homeowners who cannot take out a secured loan either are often taking drastic action when they need to raise finance.
Illegal lenders – also known as loan sharks – are at the heart of a government crackdown at the moment in the UK. However, for many years these illegal lenders have been targeting those that are struggling severely in terms of finances, and cannot get a loan from a mainstream lender. And despite the extortionate amount of interest that these illegal lenders charge, coupled with the possibility of threats and violence if the borrower does not keep up with repayments, many people that cannot get any other form of finance are still turning to them out of desperation.
However, consumer group, Credit Action, has now urged consumers in the UK to steer well clear of these illegal lenders, as they have no protection should something go awry, and could even end up in a far worse situation than before. Instead, the consumer group advises those with very bad credit to consider payday loan companies, credit unions, and even emergency government loans if a desperate need for cash arises. In the meantime, the government plans to come down hard on these illegal lenders, and has already started looking closely into the matter with the intention of trying to rid the UK of as many of these loan sharks as possible.
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