Guaranteed payday loans are one of the most popular low interest loans offered by the government, colloquially known as “friend-in-need” loans. While the government’s crisis loans have been helping millions of Brits for many years till date, regulatory procedures are about to change, as the government is currently facing budget deficits.
The Department for Work and Pensions has informed us of new regulations for Crisis loans which will come into effect from the month of November, 2018.
Crisis loans are meant to aid those of low income who need emergency cash to meet essentials in their day-to-day life. Though crisis loans have been helpful to many in getting their emergency needs fulfilled, ranging from buying cookers to bedding, some of these benefits will no longer be available in the future.
The proposed changes in Crisis loans are the following:
• Guaranteed cash advance will no longer be given to buy cookers or beds, though essential support will be given to those who are victims of natural disaster.
• Loans for meeting living expenses will be reduced from 75% to 60% as overall percentage rates, parallel to the criteria for Job seekers allowance.
• A maximum of three crisis loans will be awarded per year, in order to meet general living expenses.
Though these changes might seem hard, on the flip side there are some good reforms on the way. A reformed structure is being proposed to replace community care grants and crisis loans which will be provided by the local authorities in England. This is intended to support those who are in extremely needy situations. These reforms are planned to be initiated from 2018 onwards.