Direct Payday Lenders

When it comes to borrow money there are always a high number of different things for people to consider. That person looking to borrow the money must know that they one hundred percent need the loan in question and then if so they have to then select a realistic amount to then borrow and this amount must also then be affordable so the debt can be comfortably repaid by any borrower. The actual type of finance can then be selected and here there are different options always. People can often apply for short term loans where they borrow small amounts over limited periods of time. A common short term loan would be the payday loan. Instalment loans are usually the common alternative and here people tend to borrow larger amounts for repayments then over a longer period of time. Credit cards are also a very common way to borrow money from the financial market place. As well as considering the type of finance someone wants they have to also choose the lender to apply through and this can be a tough choice due to the amount of variation here. Below I will explain further about loans and will explain in detail the kind of loans direct payday lenders can offer to people when they need cash.

As the name would suggest a common loan a direct payday lender can offer would be the payday loan itself. This is when people take out amounts somewhere between £100.00 and £500.00 but sometimes more and then repay the debt within a single month on your next available payday. A payday loan is the most common short term available in the market place and whenever a repayment becomes due it will always be done so within just thirty one days. These loans are aimed to help people with poor credit and people who have found it difficult to get credit elsewhere and they certainly can work out to be a very expensive way to borrow money. The interest can vary on payday loans mainly dependant on the lender chosen however most likely lenders can charge around £25-£30 per £100.00 borrowed by someone and that is expensive interest especially considering how little time people take out the loan for.

It can now also be common that direct payday lenders can now offer people the chance to borrow small instalment loans. People can sometimes borrow more here than what payday loans offer. They can also though just offer similar amounts to payday loan borrowing but then they allow people the chance to pay for the loan over longer periods of time in instalments. People for example would borrow maybe £400.00 but then rather than pay in excess of £500.00 to clear the loan in full people can pay the debt over longer periods of time making the debt easily to repay and afford. Whenever anyone repays short term debt in instalments however, remember the longer the loan is taken out for the more repaid towards the debt. I have always liked the flexibility given on some instalment loans in the financial market place.

 

Bad Credit Payday Loans

People may or may not know that when it comes to borrowing money most people will have a whole host of different options they can potentially apply for and then possibly take out. There can for example be short term loans where people tend to borrow small amounts for repayments then due over short periods of time, instalment loans can then be taken as an alternative and here people tend to borrow larger amounts for repayments then back over longer periods of time. Bad credit payday loans are a common type of short term loan and a mortgage is actually a very common type of instalment loan borrowing. Another common type of finance borrowing is credit cards, a high amount of people have these and they allow people the chance to pay for certain items and also people withdraw cash using them up to a set limit via the actual card itself. These three financial items are all common but they should always be explored in detail before anyone can then make a loan application request.

There can always be times when people need to gain access to money and it can be for so many different reasons. There can be people who need large amounts of cash as they are looking to make a possible one off significant purchase for items that include a possible new car or maybe even a deposit on a new house. There can be other people who just need money to help possibly tide their finances over until the next time they are paid by their employer. Now no matter what absolutely anyone needs cash for if they have the money saved then they can feel free to use this to pay for whatever is required however if that is not possible then the chances are they will need to borrow it.

I think it is always safe to assume that when people firstly want to borrow money they will approach their friends or family to get what they need. They know if they borrow money this way it will be interest free and they can just repay back the debt as soon as they have the money disposable again. If that is not the case then they will look to borrow from a lender. There can be some lenders who aim to help people with bad credit as well as normal borrowers who need money quickly. There are so many lenders out there offering finance to potential borrowers. If people have bad credit then the chances are they always find obtaining loans difficult or when they are occasionally accepted they find this very expensive as a way to borrow money. Bad credit payday loans for people with bad credit then here may be useful, they can look to quickly issue people with finance for minimal amounts even if people who are looking for loans have been rejected for loans elsewhere. For people with bad credit a bad credit payday loan may be the only way people can borrow cash when they need to.

What are Direct Payday Lenders

As consumers considering a form of short term credit, there are several different types to keep in mind. The first of which is the type of loan we are considering and the second is the type of lender offering the loan. Many of us are aware of short term loans or payday loans as they are also known. Having been available for nearly a decade now, most of us have seen an advert, heard a story or used the product at some point in that time. The market as a whole is currently in a transitional period and this means the type of loan available is changing. The changes which are taking place are certainly for the good of consumers and have been brought above thanks to the new guidance of the Financial Conduct Authority. This governing body, also known as the FSA, have been put in place to better protect consumers who use the market and also to give better guidance to lenders who want to consider loans in a consumer friendly and affordable manner. The introduction of the FSA means now that the market has better control and therefore consumers can make better and more informed choices when it comes to their short term borrowing needs. Today we will take a brief look at the type of loans offered with in this market and more importantly, the difference between direct payday lenders and the financial brokers.

In order to fresh our memories and update previous understandings of this market, let’s first review the type of loans which can be found in this market. The first type of product is considered the classic lending resource of the market and is known as a payday loan. As the name suggests a payday loan is a small loan which is borrowed until your next employment pay date. The amount payable for such loans is often reflective not of the time period for borrowing but the specific amount borrowed. An example would be a customer borrowing £100.00 until their next pay date. It is likely in the vast majority of cases such a loan would cost £100.00; whether repaid in a week or 20 days. The newer and more flexible type of borrowing is the instalment loan, which like the payday loan, allows consumers to borrow a small amount of money but allows repayments to be made over a pre-agreed number of instalments. Often in the case of instalment loans, the interest is applied on a daily basis.

What many consumers may not be aware of is the fact that within this market there are direct payday lenders and then there are financial brokers. In the case of a broker they do not actually offer a loan directly and instead offer consumers the service of locating a potential lender, often at the cost of a one-off fee. Direct payday lenders are different and often considered more favourable. Direct payday lenders will consider your application directly and the great news is they will not charge a fee for the service, whether the loan is ultimately possible or not.

How to Afford Short Term Loans

Thankfully nowadays there is a whole host of short term loans which are available to consumers. This means in the case of most, there is likely to be a resource which is suitable. In years gone by these loans were somewhat limited in their product offering, with the prime focus being to deliver a simple and easy to access product. As the years have rolled by the structure of short term loans have adapted to ensure they are still able to meet the needs of the modern day consumer. In the past the needs of consumers was somewhat different. Around the time of their introduction the masses were still getting used to having the internet creep into every element of their lives, nowadays it would be a fair statement to make to say we simply could not live without it. At the time however these loans were a completely new concept and allowed consumers to access a small amount of credit from the safety and comfort of their own homes. As a result of this fact the loans themselves needed to be simple and easy for consumers to understand.

The original product focused on the understanding that short term loans were best suited repaid in a single instalment. This meant consumers were given the option to borrow a small sum of money and it be repaid typically within a 31 day period of time. This meant for consumers who were new to borrowing in this way, as most were, or even new to any form of borrowing the repayment terms were deemed as simple and clear to understand. Typically a customer would repay £30.00 interest for every £100.00 which they borrowed, meaning a £300.00 loan would cost £390.00. Usually the period of the loan, whether it be 7 days or 31 days did not have an effect on the amount which was then payable; as interest was applicable to the amount borrowed not the specific period of time. For consumers who budgeted wisely for these type of short term loans, the resource was often useful and served the purpose for which they were intended.

As the years have passed it has become increasingly clear that the old style of borrowing, discussed above, is not as useful as it once was. Nowadays consumers have become better able to manage their finances when repayments are made on a monthly basis. This means repayments are more affordable when instead of repayment a lump sum, several smaller repayments are made over an agreed period of time. With this in mind it is of little wonder that short term loans have adapted to offer this type of product. Nowadays short term loans can be repaid over a number of repayment terms to ensure the loan as a whole, is able to work alongside consumers existing finances and not against them. Typically short term loans can now be repaid over any number of months, still starting from 1 through to 12 in the case of some lenders. So ultimately there is plenty of choice available.

Payday UK

Payday Lending has become an integral part of today’s financially unstable society and the reason why it is regarded to be unstable is because, in previous years, the volatility of the financial world was being witnessed only by mainstream banks and financial institutions but after the 2008 crisis, it has trickled down to every single individual. Payday Lending came into existence in the 1990’s but was then, not as popular as it is today and their popularity just keeps rising. This is mainly because a majority of people are strapped for cash and are finding it difficult to meet ends to ends. A lot of these people also don’t have access to long term loans and as a result, have no way to meet their expenses on a regular basis.

The question that one needs to ask is whether payday lenders like Payday UK, Wonga and the major players in this industry have made it easier for people or have they added to the ever-existing financial debt? Are people benefitting from these services or are these companies an extension of the large multinational banks whose sole agenda is to create an illusion of wealth.

Let us discuss the origins of Payday Lending:

There was a landmark judgement made in a 1978 court case, where banks were given the go ahead to decide and charge interest rates on the basis of where the banks were physically located irrespective of the borrower’s location. For example, there could be a certain law which resisted huge interest rates in one particular state, but a bank could be functioning out of a state with a less strict law, servicing people in the high-interest state. This implied that you could service anyone living in any state and saw the rise of credit card companies.

The second judgement was a part of the Monetary Control Act, which stated that financial institutions could decide interest rates based on the market. This change in law saw a rise of payday loans, as now you could charge exorbitant interest rates to the borrower and attribute it to the market rate. This law gave these financial institutions a free hand to function and minimized the scope for regulation. Pay Day loans saw their first growth in the country of the US, but after a period of time, when the US started keeping a check on the economy in addition to the states having the authority to regulate their own interest rates, these payday lenders shifted to countries with lesser regulations such as the UK and thus was born the payday lending industry in the UK.

It has seen the rise of many major lenders like Payday UK, Wonga, and Lending Stream to name a few. These institutions have seen phenomenal growth in a span of a few years and most of these companies are still being controlled by US companies.

How has it impacted the borrower?

The motive behind setting up these institutions was to supply credit to people who didn’t have access to other forms of credit but their large interest rates, collection methods, misleading advertising has created a need to urgently regulate the functioning of this industry. They may claim to be making a positive change in people’s lives, but the state of economy has something else to show. It is unfair to just blame these institutions, as they were always in for making money at the cost of anything else; the borrower has also contributed to the importance of these institutions.

After the 2008 mortgage crisis, there were many who were left with absolutely no income to spare and were barely making it through. They were looking for an avenue for an additional source of income and payday loans provided that outlet. Although their initial purpose was to bridge the gap between the banks and the borrower by creating an alternative source of credit without giving too much importance to your credit worthiness, a move that was welcomed by the borrower, this has led to one of the major disasters that the financial world has seen. Borrower’s looked at these loans as a blessing and didn’t understand the complexity of these loans. APR was one such interest rate that was slowly but steadily eating into their income and the longer the duration of the loan, the higher the interest rate.

Borrowers were not interested in finding out the penalties involved with the non-repayment of the loans and were clearly not educated enough on the disadvantages that these type of loans carry. This was a failure on the part of the borrower, which was cashed in on by the lender who placed his entire advertising campaign centering on how they could get you of their financial trouble. What it read between the lines, was how they were going to get you out of the trouble you were in, to put into a bigger pool of trouble.  Their high APR, penalty fees, no limits on the amount of times you could roll over a loan, pathetic collection methods  were all various arms of this body of lies, these institutions had created.

Payday Loans might be here to stay, as there are many experts who feel that regulation will place an even bigger burden on the borrower, as these lenders will try to convert their loss of revenue into profit, by introducing more appealing schemes in the form of short term loans for mortgage (which some payday lenders are already offering) which could see an even further crisis.

The way out of this is not elimination and certainly not just regulation. The borrower needs to be guided in a manner which could benefit his financial position and at the same time, a borrower needs to be informed and keep up-to-date with the developments of the industry, so that he can make a more intelligent choice while applying for these loans. There are alternatives to payday loans and these should be considered at length, before jumping into these loans, just because of their easy accessibility.

 

 

Lending Stream

Lending stream is one lender that has defined the face of payday lending. In an industry which is thriving on high interest rates and charges to the borrowers, Lending stream is a name that stands apart. This can be vouched for by borrowers who believe in their commitment to service, their emphasis on transparency and competitive interest rates. Many financial experts say that the policies that a lender functions on define his reputation. This can stand testament to the services that Lending stream has provided to their customers worldwide. They are known to be one of the few lenders who withstand from engaging in fraudulent practices and one who hold customer satisfaction in far greater esteem than the rest of their competitors. This can perhaps be understood by their company being one of the few major players not reporting a growth in 2 years.

Introduction into Lending Stream:

Lending Stream is a regular payday lender who has been in the industry since 2008, providing short term lines of credit to borrowers all over UK. The USP of Lending Stream is their strict affordability analysis which differentiates them from the rest of their competitors. The main idea behind this is to evaluate whether the borrower is able to repay the loan in a sustainable manner over a period of time.

They have been founded by the same group of people who had developed the fraud detection system which was instrumental in protecting transactions on over 2.5 billion credit cards worldwide. So it is not difficult to understand the depth in their experience. Their team consists of brilliant data scientists, engineers and business analysts all over the world.

Their main philosophy behind their inception is the notion that “who deserves credit, should get credit”. This is important as there are many borrowers who are financially irresponsible who are being provided credit by many lenders in the market without a thorough back ground check. This leads to discrepancies in functioning, default on loans and others. They are using their technology and their knowledge and experience in the field to develop innovative products that could uplift people beyond their current state of financial dependence and make them more responsible borrowers.

There are some things that one should know about payday loans and Lending Stream ensures those questions are answered in the most appropriate manner possible.

What are the eligibility criteria?

The eligibility criteria are one major concern for an individual wanting to apply for these services. It is needed to be understood that one must be 18 years of age along with a stable income of at least 400 pounds, a UK citizen and must have a valid debit card and a bank account. Self-employed people are not eligible for this type of loan as the risk is more in businesses, but there are several other financial institutions that are serving their needs.

What is the approval process like?

The approval process needs to be strict since it is the one area which differentiates Lending stream from its competitors and also adds value to their practices. In order to decide how much one should borrow, they use their expertise on technology to devise a sophisticated credit scoring system and an affordability analysis which ensures that they choose the right candidate for the loan. The process is fairly simple as once you apply for the loan, your personal financial situation is analyzed and if all goes well, the money is credited to your account within 24 hours.

What about no fee loans?

Understanding the many complications behind no fee loans, it is first important to understand what a no fee loan is. It is generally referred to as a financial term which indicates the absence of any fees while applying for a loan. Although there aren’t many institutions that are offering no fee loans, Lending stream could be one of the pioneers of this type of service. They have loans which carry no application fees, no transaction fees and no early repayment fees.

What is the loan fee?

This is an important consideration for the borrowers as there are thousands of major players in the market dealing with payday loans and this is one feature which makes one popular over the other. In a competitive environment such as this one, the lender with the lowest fee wins. There are loan fees which need to be understood and for that, let us discuss the following:

  • The first time that you default on a payment on the specified repayment date, a default charge of 15 pounds is charged.
  • If on any other occasion, you are unable to pay the loan on the relevant repayment date, if the default charge is not charged to you on one occasion, a further charge is levied which could be combined default charges amounting to 15 pounds.

What are the risks involved with taking out a loan?

A borrower needs to understand that there are several risks involved with taking out these types of loans and it is an important consideration to know what you are getting into. It is understandable that you might have unprecedented expenses and a legitimate reason for applying for such a loan, but what is more important is to know what your future ability will be to repay your loan. As this can lead to more expenses and default charges that can add up and become a much larger amount than the one you had originally bargained for. The team at Lending Stream ensures they have done a thorough check on your affordability and guide you through the entire process so that you can make an informed decision. There is a certain science behind their practices and they play an advisory role more than just a lending role, which has served as a benefit to anyone who has been associated with them.

The responsibility lies with the borrower and not just with the lender alone and this is something that needs to be reiterated by every lender in the business.