When looking into the options available to you when faced with a financial emergency, it is important to look into every option. Whether this is the use of an unsecured loans or a payday loan alternative, they can all be used to help you out of a difficult financial situation. In this article, we will be looking into the global regulation on payday loans and how this will benefit you.
The Implementation Of The FCA
When the number of Payday loan users begun to increase, there was an organisation called the FCA set up to oversee the conduct of lenders and the industry as a whole. The FCA was implemented by the UK government to ensure that the market is honest and fair to the customer for the best possible deal. They are the central hub for complaints as well as the regulators of more than 18,000 businesses.
The FCA is also responsible for overseeing the employment of 2.2 million people and contribute to 65.6 billion in tax to the UK economy. As an influential business, they are the central hub for ensuring that the market works fairly to benefit not only the customers but the staff and shareholders that are in this industry.
Restrictions They Bought In
As part of the implementation of the FCA by the British government, this bought about 2 key regulations to fulfil their purpose and keep the industry as fair as possible. The first regulation that was implemented is that the interest rates for general borrowers are capped at a maximum of 0.8%. In addition to this, the loan repayment cost can be no more than double of what is being borrowed, thus making loans more affordable for the general public and ensuring that interest rates cannot reach astronomical heights.
This is beneficial for the general public as well as the finance sector as payday lenders are under a certain level of control with restriction. This, therefore, prevents them from making unfair or crippling decisions account methods and forms of promotion in order to keep it as fair as possible.
Caps On Interest Rates
In addition to the interest rate caps and other restrictions implemented by the UK, there are a number of other interest rate caps that are taking place overseas in countries such as the USA and Canada as they have both placed caps on how much can be owed. This is key to the success of the process, as this will help to ensure that any business is not taking advantage of the borrower. This is key to ensuring the success of the financial sector as well as ensuring the financial security of the borrower in the long term.
Further Restrictions In the Future?
Though there are no immediate signs of further restrictions, it is only a matter of time until other countries around the world begin to implement elements such as this to ensure the stability of the financial sector. Whether this is increased restrictions, an outright ban, or rules and regulations to abide by, only time will tell as to how the regulations will be implemented and for how long they will last.
Whether you are looking into payday loans as a whole, or you are considering the options that you have in case of a financial emergency, you can be sure to find a stable alternative to help you to make the right decision when faced with a financial emergency.