Don’t be Broke Reviews

Although they originated in the United States, it may come as a surprise that payday loans are not strictly an American phenomenon. In fact, several countries around the world have a thriving payday loan market. One country included in this list is our tea drinking friends across the pond. While relatively new there, the U.K. has seen a sharp increase in the amount of lenders operating, with the amount of loans currently being withdrawn at four times the number it was in 2006.

In fact, these businesses make up about 20% of the total revenues acquired from the loan industry. Needless to say, the payday loan industry is going strong in the U.K., and while their system is based on similar practices in the United States, there are many important differences in the rules and regulations that govern these businesses in each country.

The loan business in the United Kingdom is relatively free of the confines experienced by lenders in the United States. In particular, whereas in the US there have been several laws passed at the state level restricting the annual percentage rates that payday loan lenders can charge, the UK has no such regulations, and lenders may charge as high of an APR as they choose. The only restriction is that lenders must have the APR clearly stated in advertisements and on loan application documents. However, this practice has not alleviated criticisms of these businesses, as critics claim that customers typically do not understand these numbers and are therefore still being manipulated into taking out loans they normally would not.