The Church of England has set the stage to compete cash online lenders out of business. After growing tired of the abusive tactics used by the short-term loan industry in England, the church has set their sights on opening credit unions that will offer more affordable alternative money options.
The cash online industry in England is known for unfair practices.
The amounts of interest and unfair collection practices have brought fear and financial dismay to many in the United Kingdom. The Archbishop of Canterbury released the church’s plan last week.
Continuous bashing of the online industry is not solving any problems. No matter where you live, there will be lenders who are fighting the good fight while others snake their way around best practices to make money off customers. Since there are many US states which have regulations in place, there is already a much stronger hold over the industry in America. Things are different in the UK.
The lenders in the UK advertise on the radio and television. Payday loan companies pay for air time during preschool television shows in order to target the parent sitting at home watching those programs with their children. Their APR’s are calculated in the thousands. People who sign up for these loans are falling fast into financial destruction.
The Archbishop is focusing his efforts on creating a different option for those in money troubles. By opening the credit unions to service similar loans at mush smaller rates, he feels that the big name short-term loan companies will have to lower their costs in order to compete in their own market.
It is quite a job to take on, but one which will hopefully have great results. The government will control the amount of interest the credit unions can charge. The competitive market will force lenders to lower their prices or get out of business. This is a proactive approach to solving the problem.
Here in the US, there are credit unions and banks which already offer short-term loans. As long as you have an account with the financial institution, you can get funds advances online through their website. There have been both pros and cons reported as far as these loans go and like with any other service, get to know the terms and conditions before you sign. Banks and credit unions have full access to your bank account. They can freeze your account as well as be the first on the debit list once your paycheck is deposited.
Banks and credit unions may have lower rates than some other direct lenders, but their hold over your money may not be worth the small savings. It is always good to check out all your options before you decide. Those in the UK will have more options to choose from in order to save them from predatory practices. Never go into a money transaction blindly. Find out what is expected of you as well as the consequences for failing to do so. Direct cash online loans will only be helpful if you can afford to pay them back in a reasonable time.