The United Kingdom is considering new rules to make getting loans harder. It is being considered because it was found by the Learning and Skills Council that 9 out of 10 customers could not even calculate basic formulas and numbers. Now, new regulations may require customers that need loans to take a test.
Concern that there is not financial knowledge
A Consumer Financial Education body was formed in the United Kingdom because of the global financial crisis. The group found out that basic questions couldn’t be answered by about 74 percent of Britons who have mortgages. 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 personnel loans.
A possible solution?
The UK is considering a test as one of their options. A test could be taken by customers getting a loan. The test would make sure consumers know basic features of the loan and financial products they are using. Example questions might include the interest rate of the loan or the term of the loan. Many think there should be a simple declaration given that the terms of the loan have been read and understood.
The way loans are sold
The Treasury and Business departments of the government are co-running the review of loan practices in the United Kingdom. This review is also going to be considering new regulations that require lenders to reveal the full amount of interest the loan would accrue over time. Individuals may more very easily “start over” when they change some of the bankruptcy regulations as well.
