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Nearly a year has passed since the UK bounced back from the recession. Now, the economy is dealing with the big clean-up, and the new coalition government is trying to do this by introducing severe austerity measures. These include slashes to public funds and tax increases. But is the public improving at managing cash?

According to recent surveys, normal people in Britain are getting better at balancing their old debts, but doesn’t automatically convey that they aren’t gathering further debt. Saving has gone up, so it goes to show there is evidence which shows that people are being more careful about the level of money they spend. But a compendium can only show a general average for the whole country. Actually, individual debt is still very high and there are lots of consumers who have a hard time with money every day.

On a regular basis, there are fresh cautions about shady lenders such as loan sharks, which sell criminal loans with bad credit to individuals who are really short of cash. Loan sharks are not legitimate loan providers, and generally demand extortionate rates, which the borrower wouldn’t manage to pay back. When the individual ends in trouble with the loan, the loan shark will either hand out more money at even more extreme interest rates or introduce threatening or violent behaviour to enforce payment. At no time is it worthwhile using a loan shark as the situation is likely to end in tears. However what about alternative non-bank loans on offer today? What precisely is possible and which loans are worth the while?

There are lots of perfectly legitimate loans on the UK loan market nowadays. These include payday loans or wage day loans, logbook loans, guarantor loans and other types of specialist loans. They are not generally provided by commercial banks yet you can find them online or in television adverts. Pay day loans are available to individuals who do not have an ideal credit rating, or who could have been turned away for a lending product from a commercial bank.

So even if a person has been to court for bankruptcy or doen’t earn an income, they will in most cases be accepted by loans with bad credit lenders. As the loan taker poses a higher risk to the lender, the borrowing rate on pay day loans are usually a little higher than on other loans. This is because the borrower is more than likely to have some difficulty to settle the loan, considering their past performance with lending products. By bringing in a slightly larger rate, the loan provider is managing the heightened risk level. However, payday loan lenders are (for the most part) completely legitimate loan providers and won’t employ any of the approaches employed by loan sharks. To be sure, it is good news to someone who is hard up, that they could take a loan of up to 1,000 pounds and get the money fast. However if they are already in a lot of debt, then it may be careless to take more debts.

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