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Nearly a year has passed since the United Kingdom exited the recession. At present, the economy is coping with the aftermath, and the new coalition government is giving this a go by bringing in a tough new budget. These include plans for public spending cuts and a rise in the VAT rate. Yet is the public getting any better at coping with money?

If the latest surveys are anything to go by, ordinary UK households are improving at balancing their existing debts, but may not signify that they aren’t gathering further debt. Saving has increased, so it goes to show there is evidence which shows that consumers are being more careful about the sums of money they spend. But a compendium can only show a general average for an entire nation. In fact, private debt is still rather steep and there are masses of people who deal with a daily battle against debt.

On an almost daily basis, there are new cautions about dodgy loan providers like loan sharks, which offer illegal bad credit loans to households who are really short of cash. Loan sharks are not registered as official lenders, and usually charge extremely high interest rates, which the victim wouldn’t manage to pay back. When the individual ends in trouble with the loan, the loan shark will either offer them more money at even more extreme interest rates or introduce warnings of violence to dictate settlement. At no time is it worthwhile going to a loan shark as the situation will inevitably end badly. But what about other non-bank loans on offer today? What precisely is possible and which ones are safe to use?

There are masses of authentic loans on the British loan market these days. These include payday loans or cash advance loans, logbook loans, guarantor loans and many more independent credit products. They are not generally offered by commercial banks but are often found online or in television adverts. Pay day loans are on offer to borrowers who do not hold a perfect credit score, or who could have been turned away for a loan from a mainstream bank.

Therefore even if an individual has been to court for bankruptcy or is unemployed, they will usually be taken on by payday loans lenders. As the borrower poses a higher risk to the lender, the borrowing rate on payday loans are usually a little higher compared with other loans. This is because the loan taker is more likely to experience some problems to pay back the loan, due to their past performance with loans. By introducing a slightly higher interest rate, the lender is managing the additional risk factor. However, payday loan lenders are (in most cases) completely legitimate loan providers and won’t employ any of the strategies utilized by loan sharks. Of course, it is great news to a person who has money worries, that they can borrow up to 500 pounds and get the money fast. But if they have lots of existing debts, then it could be careless to apply for more loans.