Why More People are Borrowing Money Now More Than Ever
Over the course of our lives, we’ll have to take out additional finance to help us – whether that’s to buy a house or to deal with an emergency expense. Recently, more of us will be feeling the pinch of the rising cost of goods and services, as well as energy and petrol prices, which are some of the main reasons why people are having to borrow money now more than ever. A pay day loan, short-term, or bad credit loan can be helpful to those of us that are struggling to stretch our income to cover costs. Read on as we find out more about this below.
Types of personal finance
As we continue to feel the effects of the rising cost of living and a dwindling economy, more of us are taking out loans to help us get by or to use in an emergency if our finances won’t stretch as far. Here are a few of the most popular types of personal finance that some may find helpful during such a difficult time.
• Payday loans: These loans are for emergency expenses, and many apply if they can’t make their money stretch until payday, and they’re faced with an emergency expense. Applications can often be approved on the same day, so you can have access to cash when you need it most.
• Short-term loans: These loans are typically taken out over a shorter period, up to around 9 months. You can have access to money quickly and choose a repayment plan that works best for your finances – you can even repay early if you’d like to.
• Bad credit loans: You can have access to credit even if you have a poor credit history. Your lender will decide whether you can afford to pay the money back and approve you on that basis.
The increasing cost of living
Many of us will be aware of the rising cost of living all over the world – which is due to a few factors like global economies trying to recover from the damage of the pandemic, and other factors like the conflict in Ukraine and Brexit. Many household items have increased exponentially in price meaning weekly food shopping will be higher, and the price of services is also rising, so if you need your car repaired, or your boiler needs a new part, you’re likely to be paying more than you would even just a year ago. Because these costs are rising, and many of our wages aren’t, we will all have to make our income stretch further to cover the basics that come with everyday life, and if you’re already on a low income, this can be increasingly difficult.
Many people will find that they are struggling to cover their bills with the increasing living costs. This means that more of us will be looking for additional financial help to give us a bit of wiggle room each month. Usually, these tend to be personal loans from direct lenders, so they can have access to money quickly and easily.
Unemployment
As we move closer to a recession, many businesses are having to think about whether they can afford to keep their staff in a job. Employers will be looking to cut costs – just like us – so that their business has more chance of surviving in difficult economic times. Unfortunately, this happens in the way of getting rid of staff, and their monthly wage bills. As more workers lose their jobs, they also lose their income, meaning that they will need to find an alternative, short-term way to cover their monthly costs whilst they look for another job. This leads to them borrowing money to help them when they have no income.
The rise in energy bills
As well as our food bills and the cost of goods and services, energy bills are also increasing. We’ve seen the price of energy skyrocket over the last couple of months, meaning that it is more expensive to keep a warm and cosy home, and even cook for the family. As the winter draws in, many will have to decide between heating or eating. Because of the rise in the price of something as important as heating, covering the costs of this, as well as other necessities has become even harder – driving people to take out loans and personal finance to help them make ends meet to live comfortably.