Lending Stream is an agency that provides you with a loan, with the incentive of a longer repayment period consisting of six months or less. There are numerous other agencies that provide short term loans which can be repaid between 10 to 40 days. This in turn leaves the borrower with a very short window in order to find funds to repay the loan on time. The loans are also as easily available to the public as any other. In other words, Lending Stream can be called as an alternative to payday loans within the payday lending industry.
Lending stream has been in operation since 2008 and has been providing loans since. With its focus on a slightly smaller loan amount, it has catered to the mid segment with its main vision of giving credit to anyone who deserves it. By keeping a crisp time frame for its loan repayment, it is also ensuring a certain amount of credibility with the debtor (customer) world and indirectly demanding an accountability that is more affordable. This is definitely one way of looking at payday loans and does depict the positive effect that these payday loans have the potential to make, if they have behaved in a responsible manner.
Lending Stream provides you a representative example of financial concept, which helps one understand all the charges and costs involved in taking a loan. The example of a six month loan with Lending stream is shown below:
Annual Interest Rate: 292.0% (Fixed)
Total amount of credit: £200
Representative APR: 1272.0%
Duration of agreement: 6 months
Total amount payable: £391.68
Total charge of credit: £191.68
The repayment charges for which are as follows:-
1st repayment: £46.40
2nd repayment: £88.00
3rd repayment: £78.40
4th repayment: £69.76
This example is necessary to understand the implications of taking out such a loan. When one is using a payday service, it is also essential to know why these loans are being used in the first place, what the rates of interest are and how these interest rates will impact one in the future. In order to arrive upon a decision on how much one can borrow, Lending Stream employs a credit scoring system and an analysis on affordability; so as to ensure that you are able to repay the loaned amount sustainably. If you have shown good behavior in repayment you can also apply for higher loan amounts. It is a simple process, where ones loan is easily approved of if the person meets the criteria. At Lending stream, the application for a short term loan requires no application fees, no transaction fees, and no early payment fees, there is no such fee involves apart from the one imposed on missed payment dates.
Even though it might seem as a more viable option and Lending Stream certainly does do a good job with their practices, it is important to understand a few things before one jump into such a loan. Having said that, it is extremely essential to be careful with your short term loans, as it can also bring about a tendency to be reckless with your money. Sometimes, banks tend to serve their own interest a little more than their customers and as a result, build the fear of a financial debt in the minds of the customer. Lending stream has built its reputation around its sincerity in its operations and relationships with its customers and has gone to the extent of carefully evaluating your financial situation for you, to understand your need for the loan. A team whose responsibility is to scrutinize each application might seem a little too harsh, but for one who has looked at their evaluation process realizes they are doing it for their own good. If they make an effort to check your credit history, they in turn are ensuring that there is no need to re-check and run after you for collection. This is a practice that should be adopted by all the major players in the industry but unfortunately this is not the case, which has led to the meltdown that we hear and witness today.
Banks are known to save themselves the trouble of bad credit customers, as it affects their reputation in the market. Lending Stream chooses to differentiate themselves from their rivals on the basis of the principles their company was founded on. These are simple principles which include assessing your current situation and evaluating your ability to repay your loan in the future, with respect to your current financial status. This is done keeping in mind your past credit history, but a decision is not solely made on that criteria. Your loan is approved with a careful understanding of both these situations and the decision is made within minutes, through access to your personalized information. This method is a more personal one and helps in building a unique image for the bank. At the end of the day, a lender should be in a position to make a fair choice while lending and a fair choice can only be made, if all these aspects are taken into consideration.
One thing that needs to be ensured by the regulatory bodies is the elimination of the support which these lenders are receiving through the various financial institutions that are operating out of the US. Even though the authorities have issued strict warnings to these institutions, there needs to be a more sophisticated research on their exact involvement and serious consequences spelt out for these institutions. Borrowers are being misled into this debt trap by most of the financial institutions and this is what has led them to falsely trust these lenders. This can only be achieved when the lenders and the borrowers are working towards the same cause and when the borrowers have the pre-requisite knowledge about the dangers associated with these institutions. This is where the authorities need to play a larger role, in informing the borrower and ensuring better services to the larger population.