A moneylender offers small personal loans at high rates of interest, usually higher rates than the market rate charged on credit cards or on bank overdrafts. Personal finance is the application of the principles of Finance to the monetary decisions of an individual or family unit Credit is the provision of resources (such as granting a Loan) by one party to another party where that second party does not reimburse the first party immediately thereby generating Debt is that which is owed usually referencing Assets owed but the term can cover other obligations A credit card is part of a system of Payments named after the small Plastic card issued to users of the system A credit union is a Cooperative Financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift providing credit A debit card (also known as a bank card) is a plastic card which provides an alternative payment method to Cash when making purchases Debt consolidation entails taking out one Loan to pay off many others A loan is a type of Debt. This article focuses exclusively on monetary loans although in practice any material object might be lent A mortgage is the pledging of a property to a Lender as a security for a Mortgage loan. A pawnbroker is an individual or business entity that offers monetary loans in exchange for an item of value to the given pawn broker A contract of employment is a category of Contract used in Labour law to attribute right and responsibilities between parties to a bargain A salary is a form of periodic payment from an Employer to an Employee, which may be specified in an Employment contract. A wage is a compensation workers receive in exchange for their labor. An employee stock option is a Call option on the common stock of a company issued as a form of non-cash compensation. Employee benefits and (especially in British English) benefits in kind (also called fringe benefits, perquisites, perqs or Retirement is the point where a person stops employment completely A retirement plan is an arrangement to provide people with an income or Pension, during Retirement, when they are no longer earning a steady income from employment An Individual Retirement Account (or IRA) is a Retirement plan account that provides some Tax advantages for Retirement savings in the United A pension is a steady income given to a person upon Retirement, typically in the form of a guaranteed annuity. Social security primarily refers to a Social insurance program providing social protection or protection against socially recognized conditions including poverty old A business plan is a formal statement of a set of business goals the reasons why they are believed attainable and the plan for reaching those goals A corporate action is an event initiated by a Public company that affects the securities ( Equity or Debt) issued by the company A financial planner or personal financial planner is a practicing professional who helps people deal with various personal financial issues through proper planning which includes A financial adviser is a professional who renders investment advice and Financial planning services to individuals and businesses Estate planning is the process of accumulating and disposing of an estate to maximize the goals of the estate owner The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds There are two basic financial market participant categories Investor vs Corporate finance is an area of Finance dealing with the financial decisions Corporations make and the tools and analysis used to make these decisions Personal finance is the application of the principles of Finance to the monetary decisions of an individual or family unit Public finance is a field of economics concerned with paying for collective or governmental activities and with the administration and design of those activities A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money Financial regulations are a form of Regulation or supervision which subjects Financial institutions to certain requirements restrictions and guidelines aiming to An unsecured loan is a Loan that is not backed by collateral. Interest is a fee paid on borrowed capital Assets lent include Money, Shares, Consumer goods through Hire purchase, major assets Interest is a fee paid on borrowed capital Assets lent include Money, Shares, Consumer goods through Hire purchase, major assets A credit card is part of a system of Payments named after the small Plastic card issued to users of the system An overdraft occurs when withdrawals from a Bank account exceed the available balance which gives the account a negative balance - a person can be said to have Moneylenders are an important source of credit to a category of borrowers who would normally be refused credit by most financial institutions because their income may be at or below the poverty threshold or whose credit score indicates that the borrower might be unable to repay the loan. Credit is the provision of resources (such as granting a Loan) by one party to another party where that second party does not reimburse the first party immediately thereby generating In Finance, a Borrower is the party in a Loan agreement which receives money or other instrument from a Lender and promises to repay the lender in a specified In Financial economics, a financial institution acts as an agent that provides Financial services for its clients or members The poverty threshold, or poverty line, is the minimum level of Income deemed necessary to achieve an adequate Standard of living in a given country A credit score is a numerical expression based on a statistical analysis of a person's credit files to represent the Creditworthiness of that person Because personal loans offered are unsecured and the risk of default by the borrower is high, moneylenders charge an effective interest rate that is in the range anywhere between 100% to 400% APR. An unsecured loan is a Loan that is not backed by collateral. In Finance, default occurs when a debtor has not met its legal obligations according to the debt contract e The effective interest rate, effective annual interest rate, Annual Equivalent Rate (AER or simply effective rate is the Interest rate on a Annual percentage rate (APR is the simplified counterpart to the Effective interest rate that the borrower will pay on a loan [1].
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Historical meaning
The historic use of the term Moneylender refers to a person who as charges a fee for the use of money (i. e. a usuror). Usury (ˈjuːʒəri comes from the Medieval Latin usuria, "interest" or "excessive interest" from the Latin usura "interest"
In the UK, the Moneylending sector is currently referred to as Home Collected Credit (HCC), reflecting the fact that loans and subsequent repayments are made and collected in person by moneylenders or their agents at their customers doorsteps. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The largest lender in this sector is Provident Financial, which has 1. Provident Financial plc ( is a financial services group based in Bradford, UK. 5m customers out of a total of 2. 5 million people who borrow from HCC providers, giving the company about 60% market share. [2].
Regulation
Moneylenders in the United Kingdom are regulated by the Office of Fair Trading, and must be licenced to lend money under the Consumer Credit Act 1974. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The Office of Fair Trading ( OFT) is a Non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, The Consumer Credit Act 1974 is a Consumer protection law in the UK.
Moneylenders who are unregulated, engage in predatory lending or seek to enforce loan agreements by illegal means such as extortion are commonly referred to as Loan sharks. Predatory lending is a Pejorative term used to describe practices of some Lenders. Extortion, outwresting, or exaction is a criminal offense, which occurs when a person Unlawfully obtains either money property or services A loan shark is a person or body that offers illegal Unsecured loans at high Interest rates to individuals often backed by Blackmail or threats
See also
- Microfinance
- Sarakin - the Japanese term for moneylender. Microfinance refers to the provision of financial services to poor or low-income clients including consumers and the self-employed is a Japanese term for Moneylender, or Loan shark. It is a contraction of the Japanese words for Salaryman and Cash.
References
- ^ Moneylenders and their Customers (Rowlingson, Karen. , The Policies Study Institute, London, 1994, ISBN 0-85374-654-0)
- ^ Doorstep agents help Provident Financial ride out the credit storm, Financial Times, 29 December 2007
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