Many families and individuals across the UK are continuing to struggle in terms of their finances, with many finding it difficult to make ends meet on a monthly basis. Whilst different people have looked at different solutions to try and ease the financial strain, one thing that more and more Brits appear to be doing is heading to pawnbrokers in order to get short term loans to tide them over.
In fact, some pawnbrokers have seen their loan books swell significantly last year compared to 2010. One such company, Cash Converters, said that its personal loan book had gone from £2.3 million in 2010 to a massive £8.5 million in 2011, reflecting an increase of almost 400 percent. This is an indication of how much households and individuals are struggling financially and the types of measures that they are taking to help bridge the financial gap on a month by month basis.
Whilst those who turn to pawnbrokers for a short term loan may be able to tide themselves over for a short period of time by taking these steps, the solution will not help them in the long term, and with the high rates of interest that they have to pay on short terms loans, many risk getting themselves into unmanageable levels of debt that will cause them huge problems as time goes on.
Many struggle to repay the short term loan that they take out from pawnbrokers. Cash Converters said that in the last six months of last year the number of people unable to repay their loans to the company increased by more than one fifth. Bad debt now stands at 11 percent of the total amount lent out by the company according to reports.