Nearly a year has passed since the UK recovered from the downturn. Now, the economy is managing the after-effect, and the new coalition government is giving this a go by enforcing a tough new line. These include plans for public spending cuts and tax increases. But is the country getting any better at dealing with debt?

According to recent surveys, regular British consumers are improving at repaying their old debts, but may not signify that they are not gathering further debt. Saving has gone up, so it goes to show there is a pattern which shows that individuals are behaving carefully about how much money they spend. Yet a survey can only show a general average for the whole country. Actually, personal debt is still rather steep and there are masses of people who deal with a daily battle against debt.

On a regular basis, there are new cautions about unsafe loan providers like loan sharks, which sell criminal bad credit loans to consumers who are desperate for money. Loan sharks are not legitimate loan providers, and generally demand extortionate rates, which the individual could never repay. When the victim lands in difficulty with the loan, the loan shark will either offer them more money at even higher rates or introduce threatening or violent behaviour to enforce payment. At no time is it worthwhile going to a loan shark as the situation will inevitably end badly. But what about alternative non-bank loans available these days? What exactly is on offer and which loans are worth the while?

There are plenty of acknowledged loans on the UK loan market nowadays. These include loans with bad credit or wage day loans, logbook loans, personal loans and other types of specialist loans. They are not usually provided by high street banks yet you can find them online or in TV commercials. Pay day loans are available to people who do not hold a perfect credit score, or who might have been rejected for a credit product from a mainstream bank.

Therefore even if an individual has CCJs or doesn’t have regular work, they will generally be accepted by payday loans lenders. Because the borrower poses a higher risk to the payday loan provider, the borrowing rate on payday loans are usually a little higher compared with other loans. This is due to the fact that the borrower is more likely to find it difficult to pay back the loan, due to their past experiences with loans. By introducing a slightly bigger interest rate, the lender is managing the additional risk factor. On the other hand, payday loan lenders are (in most cases) completely legitimate loan providers and won’t use any of the approaches employed by loan sharks. To be sure, it is good news to someone who is short of cash, that they can borrow up to 1,000 pounds and receive the money fast. However if they have lots of existing debts, then it may be unwise to apply for more loans.