When it comes to loans or taking care of your finances, it makes sense to know all of the rules and regulations that apply to your situation. You may be lucky enough to find a financial advisor that will provide you with all of the guidance and information you need but there is no harm in doing your own research. It makes sense to find out as much information as you can about your financial situation and there is a great deal to be said for learning about financial regulations.
Financial regulations are the preserve of the Financial Conduct Authority or the FCA. Anyone that has taken out a short term loan or who is planning on applying for a short term loan is advised to make themselves aware of the rules that govern the entire industry. The FCA website is informative enough and should give you a good starting point when it comes to being aware of what is on offer and what FCA regulations you have to meet.
Be aware of the FCA regulations impacting on you
The FCA came into being thanks to the Financial Services Act of 2012 and it has replaced the Financial Services Authority, the FSA. The FCA is the body that authorises and monitors all of the companies in the United Kingdom that operate within the financial services industry. The FCA states the minimum standards that are in place for all financial products, like short term loans and they have the power to suspend services or even ban services completely if they find that they don’t meet the expected standards.
The FCA issued financial regulations relating to short term loans at the beginning of 2015. This wave of regulations said that lenders were only allowed to lend money people who could afford to borrow money. This has forced many lenders and financial institutions to tighten up their criteria when it comes to loans to make sure that people aren’t borrowing money that they cannot afford to pay back.
One of the most important aspects of the financial regulations imposed by the FCA deals with the transparency of the regulations. A lender must present their interest rates and the APR, alongside the amount of money that will be repaid. All applicants and borrowers need to be made very aware of the costs involved with taking out short term loans and there is also a need for lenders to provide information on where borrowers can receive assistance if they run into difficulties in paying back a loan.