Short Term Loans and Affordability

When considering your borrowing options a popular lending market for consumers is the short term loans market. Short term loans have been available to consumers for many years now and as the years have passed the resource which is offered has adapted and changed to ensure the product remains useful. The key with this unique type of borrowing is to ensure that the loan selected is one which is truly affordable and this means it works alongside the other normal costs you face. This approach of making sure short term loans are affordable is very much the focus of lenders who exist in the modern day market place but this has not always been the case. As mentioned, the market and the products available have changed over the years and this is as a result of not always being able to correctly meet the true needs of the customers who turn to short term loans.

Affordability Short Term Loans

Affordability Short Term Loans

In the past when we generally referred to short term loans this was in the content of payday loans. Payday loans are a product and term which millions of consumers are familiar with. In some respects the payday loan was the first type of loan to be offered in the manner of an online lending resource and as such had a few lessons to learn in the early years of trading. The concept of the payday loan was simple in that lenders gave consumers the ability to borrow a small amount of money, quickly, to be repaid on their next employment pay date. The aim was to ensure the product was simple and easy to understand due mainly to the fact that this specific type of borrowing was new and therefore consumers needed to be able to trust they were getting a product exactly as it was presented. Payday loans often meant borrowing in the region of £300.00 and paying £30.00 interest for every £100.00 borrowed, so a £300.00 loan would cost £390.00 on the agreed date.

Although simple the payday loan has not proved to be the most desirable way of borrowing from short term loans lenders as the years have passed and this is mainly due to the fact that they were not always affordable to the customers using them. The lump sum repayment structure lead to customers being put in a position where they could not effectively make repayment to satisfy the loan agreement and making costly interest repayments instead. As the years have passed this fact became increasingly clear and as such lenders had to make a change in order to ensure their product was still used by consumers and offered a product which was genuinely useful. Short term loans nowadays are delivered in a package which allows repayments to be made over a number of months and therefore at a reduced rate. These loans are therefore known as instalment loans. Instalment loans are increasingly becoming the only choice considered by consumers thanks to their ability to be flexible and therefore in fit alongside their existing expenses.

Direct Payday Lenders for Your Borrowing Needs

If anyone is ever looking to borrow money they have to always consider a number of different things before any application can then even look to be made. First of all any borrower must always know that they definitely one hundred percent need to borrow in the first place and then they must always select a realistic amount to borrow. Any amount obtained by anyone must always be affordable so the debt can then be repaid. The actual type of finance can then be considered and here people can often select from a number of different borrowing options. For example if a loan is needed then direct payday lenders amongst other lenders can offer both short term and instalment loans when required. Credit cards can also be a common way to borrow finance. As well as the different finance type being considered the actual lender must also be chosen. Again here people can often choose from a variety of different lenders to apply for and through. Direct payday lenders can be just one way people choose to fulfil their borrowing needs.
Borrowing Direct Payday Lenders

Borrowing Direct Payday Lenders

I think it will always be fair to say that when people are looking to borrow money they will first of all try to get the funds from friends or family especially if only a low amount of money is required. They will try to action this when possible as any amount borrowed will be interest free meaning for any amount they borrow they only pay back that so no interest is charged. It will always be rare to borrow money from direct payday lenders as well as other financial institutions without interest being charged on any amount that is obtained. When borrowing from friends and family it is also easy enough to get the money quickly and I always feel this is important. They can just liaise with that person and get the money as soon as the lender has it available and they will most likely get this in cash or a bank transfer could be made.
Borrowing money that way is not always possible however and then other avenues may be required. Direct payday lenders for example can help in these situations. They can be useful to someone who is looking to borrow a small loan amount for a limited period of time. They specialise in short term loans as a way to borrow money. This is a way to borrow for a maximum time frame of twelve months as any loan repaid over longer than this duration is not going to be considered as a short term loan. The amount people often look to borrow from direct payday lenders would be usually somewhere between £100.00 and £500.00 but in some cases people can borrow more but that will depend on the lender chosen. Some of these short term loans can be expensive however especially as people do not tend to borrow the money for a long period of time. That will always be something to bear in mind.