People from all walks of life use loans and credit cards frequently to manage their finances as part of their day to day living. In six out of the UK’s twenty major cities, council employees are applying for short-term loans to help them meet unexpected expenses, pay everyday bills, and fund special occasions.
There are various different types loans that you can access and sites like CashLady share a monthly renewable source of data to show why people borrow in the UK.
Here are 6 reasons why people use loans:
- To buy a car: If you need a car but you don’t have cash in the bank to buy a new motor, you can apply for a car finance loan which tend to come from car finance companies. Car finance loans can be on the expensive side, so it is important to be in full-time and steady employment before you apply for a loan.
- Buying a House: Getting a mortgage is a huge, life changing milestone in a person’s life. The ability to get on the property ladder is something that millions of Brits aspire to. If you want to buy a home, your best bet is to improve your personal finances and apply for a mortgage with a bank or building society that understands your needs well. You also need to save for a deposit which can take time, so it is important to start managing your credit profile well.
- To save face from family and friends: Family and friends are two of the most common sources of cash for many people when times are hard. When you borrow money from a family member or a friend, you instantly change the dynamic of a relationship, and even risk the relationship if you find that you cannot repay the money back on time. This is a reason why many people turn to loans and credit to help them out with their financial problems instead. Borrowing from a responsible lender is better than putting your relationships with family and friends under strain.
- For DIY: Personal loans are quite a popular option for people who wish to extend their properties or do home renovations. If you’re living in a building site, building work needs to be completed quickly which isn’t always financially possible without going into your overdraft. Personal loans can be used for any personal reason as long as your lender approves of that.
- Christmas Time: One in eight Britons struggle with spending after the Christmas period and many people have taken out loans to finance the festive period. The temptation to spend is everywhere from festive food and drink to buying gifts for friends and family.
- Families with children: It can be hard to resist the temptation of getting your children something that they have wanted for a long time. The ideal way of doing this is by saving money yourself so that you can splash out on those long awaited Birthday presents for your children. For other people who are crunched by cash and literally have no extra money to save, a small loan that is repaid on payday is an option or a cash advance.