Are people on benefits being ripped off by UK loan providers?
The credit crunch may have come as a surprise to many people, particularly in the US and UK but to many people on benefits, the current crisis and inability to obtain a loan has been something which benefit claimants have been used to for many years. Not only that but they have also been susceptible to loan sharks and cheap loan merchants who prey on their inability to obtain a loan from the high street.
Just because someone doesn’t have a regular earned income does not mean that they cannot repay a loan. We need to start looking at this situation and ask that lenders and loan providers take a view on these circumstances.
Who is to say that an individual who is receiving state benefits cannot repay a loan? If someone is frugal with their benefit monies then we should allow them to obtain a loan if it means that they are restructuring their debt issues. Lenders traditionally will turn their noses up at these individuals and deem them a risk as their is generally no asset for lenders to repossess as benefit claimants generally live in rented accommodation.
The result of this is that a whole raft of ‘backstreet lenders’ have sprung up. Lenders and brokers who are charging benefit claimants up to £200 to even ‘look’ at their application. Obviously, they consider this charge non-refundable and a fair reflection of their work in processing the claimants application, when of course this is rubbish and completely unfair and morally reprehensible.
The time has come for the UK government to step in and assist people on benefits to keep them away from the clutches of these loan sharks. They bring misery and sadness to thousands of borrowers and it is time there was a government regulated scheme to help borrowers with their debt problems.
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