Nearly a year has passed since the United Kingdom bounced back from the recession. At present, the economy is coping with the aftermath, and the new coalition government is trying to do this by introducing severe austerity measures. These include plans for public spending cuts and a rise in the VAT rate. But is the UK improving at coping with money?

According to recent surveys, ordinary UK households are becoming more deft at paying off their longstanding debts, yet may not signify that they aren’t pulling in more debts. Saving has gone up, so obviously there is a trend which proves that people are more wary about the sums of money they spend. But an analysis can only show a general medium for the whole country. In reality, private debt is still rather steep and there are masses of consumers who deal with a daily battle against debt.

On a regular basis, there are fresh cautions about shady lenders like loan sharks, which lend illegal pay day loans to people who are desperate for money. Loan sharks are not registered as official lenders, and in most cases demand extortionate rates, which the victim could never repay. When the borrower ends in trouble with the loan, the loan shark will either provide more cash at even higher rates or introduce violence to enforce settlement. At no time is it worthwhile going to a loan shark as the situation inevitably brings lots of unnecessary trouble. However what about other independent loans available nowadays? What precisely is available and which products are secure?

There are lots of perfectly legitimate loans on the UK loan market today. These include bad credit loans or wage day loans, logbook loans, guarantor loans and many more independent credit products. They are not generally offered by traditional lenders yet you can find them on the internet or in TV commercials. Pay day loans are available to people who do not represent the ideal borrower, or who may have been turned down for a credit product from a mainstream bank.

So even if a borrower has been bankrupt or is jobless, they will generally be taken on by payday loans lenders. Due to the fact that the loan taker carries a larger risk factor to the lender, the interest rates on pay day loans are usually a little higher compared with other loans. This is because the borrower is more than likely to find it difficult to repay the loan, based on their past performance with credit products. By introducing a slightly bigger interest rate, the loan provider is managing the extra risk level. Yet, payday loan providers are (for the most part) fully legal lenders and won’t use any of the tactics utilized by loan sharks. Certainly it is good news to an individual who is in debt, that they may borrow up to 500 pounds and receive the cash in a short space of time. However if they hold a large amount of outstanding debts, then it could be unwise to take more debts.