Getting loans is going to be harder in the United Kingdom with the new rules they’re considering. Since 9 out of 10 customers, according to the Learning and Skills Council, can’t calculate basic numbers, that is being considered. Now, new regulations may require customers that need loans to take a test.
Concern for many who don’t have financial knowledge
A Consumer Financial Education body was formed within the United Kingdom because of the global financial crisis. Figures that were lately released by that group found that almost three-quarters — 74 percent — of all Britons with mortgages could not answer basic questions. For example, most did not know how a 1 percent rise in the bank rate would affect their loans, payday or bills. The entire country is impacted by this lack of knowledge about basics of personal loan.
A possible solution?
The UK is considering a test as one of their options. Any customer that wants to get any type of loan — mortgage, online personnel loans, or car loan — can have to take a test. This test would cover the essential features of the loan and financial products. Example questions might contain the interest rate of the loan or the term of the loan. One alternative that has been suggested to the test is a simple declaration that the borrower has read and understood the terms of the loan.
The way loans are sold
Part of the government helps run the United Kingdom loan practices. Lenders may have to reveal the amount of interest that will be paid over time with this. Individuals may more effortlessly “start over" when they change some of the bankruptcy regulations as well.
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