Many UK residents cannot afford to own a home, while others are unable to get approved for a mortgage due to strict lending guidelines. This leaves them to rent a residence, which has been a cost-effective alternative in past years.
Since the financial crisis, however, renting has become much less affordable. According to Zoopla, a property Web site, renting in the UK costs 13 percent more than the average cost to own property.
With prices increasing for other products and services, people are finding it more difficult to pay their rent each month. If the predicted inflationary increase becomes reality, things will become even more challenging.
Payday loans have risen in popularity within the UK during the past few years, allowing residents to handle temporary cash flow shortages. Lenders are now promoting them as a way to deal with increasing rent expenses.
Last month, the BBC mentioned two studies regarding UK rent costs. This research revealed that 85 percent of private rentals in South West London were considered unaffordable, with 55 percent of rentals unaffordable within the entire UK region.
Cash Genie is a leading UK payday lender that offers loans of between 75 and 750 pounds. The company believes that its financing offers a way for tenants to temporarily handle higher rent costs.
With a quick approval process, lenders like this can help tenants deal with financial emergencies. No one wants to receive an eviction notice on the door. Renters are doing whatever they can to prevent this from happening, including taking a short-term loan to help fund the rent payment.
The loan should be repaid by the following payday in order to avoid additional loans APR, which can be quite high.
People who are moving out on their own for the first time may also find a payday loan helpful. The security deposit for a rented residence can be expensive. Having to pay both the first and last month’s rent at the same time makes renting unaffordable for some people.
A payday loan can fill the financial gap until the next paycheck. Using this check to repay the loan clears the debt and allows the individual to begin renting on solid financial ground.
If falling behind on the rent becomes a regular occurrence, UK residents should seek a more permanent solution than short-term financing. A second job, promotion at work, or new career can help fill the income shortfall.
Consumers should avoid relying on cash advances or payday loans to help pay monthly expenses over the long-term. This practice is not only expensive, it can also create an unmanageable amount of debt that eventually affects the credit rating.
To find these short-term loans, UK residents need nothing more than a computer and Internet connection. Multiple payday lenders operate in the UK and each offers different loan amounts and interest rates.
Renters should shop around to find the best deal and repay the loan as soon as possible in order to avoid additional interest, fees, and slipping into longer-term debt.