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Payday Loan hype - are they a new phenomenon?

Unsecured Loans over 100 years ago

Clearly every kind of media out there loves a story that batters the payday loan. In fact, I think you would really struggle to find any story, that isn't backed by a lender, that sheds any good light on the payday loan - either in the UK or the rest of the world.
 
The way it is discussed it appears to be some form of new product - only a matter of a few years old. I would hazard a guess that if you spoke to people in the street that some would still not know, accurately, what exactly a payday loan is. At the very least they probably have some thoughts, guided by some sensationalist journalism, that are no doubt incorrect or contain a huge element of inaccuracies.
 
It may suprise you all to know that research, from the British Newspaper Archives and with thanks to the Daily Mail, has shown that adverts for borrowing both unsecured loans and payday loan can be traced to as far back as Edwardian times in 1912.

Low APR unsecured loans

As you can see from our highlighted picture, which was on the front page of the Scottish newspaper "The Courier and Argus", lenders freely adverised borrowing for loan amounts from £5 to £5000. Clearly a considerably larger amount of money back then than it is today. This particular loan advertisement was targeting customers looks for "Cash for Xmas" stating that the "compliments of the season are not worth much to anyone short of cash." I imagine this type of advertising would, today, raise a few eyebrows!
 
There can be many reasons, and many fingers pointed, as to why the regulator the Financial Conduct Authority are investigating and effectively changing the short term loans market. Arguments range from the, previous regulator, Office of Fair Trading not doing enough to political pressure to ensure this isn't a market that is left to evolve at the rapid pace that is has done over the last few years.
 
Very few can deny that there were bad practices in the industry. With a new regulator these practices can then be eradicated or the lenders themselves can be stopped from trading. This can only be good news for the customers out there that do require this type of product. It is always worth remembering that when there are markets that are heavily questioned, in any sector, there are good payday loan lenders out there in the UK. Those that have, and continue, to play by the rules and treat their customers fairly and provide an excellent service should be recognised and not be tarnished with the same brush.
 
Payday loans are not new. Unsecured loans are not new. The UK economy has long been an economy run on credit. Whether this is wrong or right is not important for this discussion. The key point is that we, as a country, have always (and you can see that this for at least 100 years) had a section of the population that is keen to borrow - likewise the UK has also had members of society, or companies, that are keen to lend. While these two elements exist there will always be a relationship there.

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