Instant Loans and their Repayment Format

Instant loans are a means of borrowing a small sum of money repayable over a ‘short’ period. Unlike bank loans or credit cards which can offer periods of repayment which extend over several years, these loans are completely different. Instead instant loans offer a facility which is specifically designed to be repaid over several months and this is due to sums of money which are available for application. An instant loan can range in value from as little as £50.00 and in the case of some lenders, as much as £750.00. The amount which can be approved will be dependent on a few different factors, with the average amount borrowed being in the region of £300.00. Lenders of instant loans operate within the short term borrowing market and therefore can be defined as being short term & high cost borrowing choices. As this information suggests, these types of loans are not designed to be used for large scale or long term financial requirements.

Instant Loans and their Repayment Format

Instant Loans and their Repayment Format

The purpose of instant loans will in some respects vary from customer to customer but their core function is that of assisting with short term financial concern. This could of course mean a number of different reasons but some typical examples include the following. An instant loan could be considered when an essential home appliance breaks and is need of repair, for example a washing machine. Similarly an instant loan could be used to cover the cost of a one-off car repair as another example. The point here is that these ‘type’ of costs are not likely to reoccur month after month and therefore could be managed via the use of a short term borrowing option.

In terms of how the instant loans product works, this will vary slightly from one lender to the next. That said all instant loans lenders are regulated by the Financial Conduct Authority and therefore are required to offer their products and service within very specific and customer focused guidelines. Those lenders who do not do so, are unable to trade within the market. Furthermore, to monitor such activity the Financial Conduct Authority assesses and individual authorises every lender. The term of repayment offered by any given lender will often be dependent on the amount being requested, although there will always be a good selection of terms. Normally lenders will often a selection of terms meaning perhaps repayments to be made over 3, 5 or 6 months for example or a short overall term such as 1, 2 or 3 monthly instalments.  The key is flexibility and choice and this is best delivered via the offer of several different repayment terms as well as loan amounts. Instant loans lenders are keen to ensure affordability is key to each and every step of their application process and this will be evident in any application which is progressed.

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Why repaying some short term loans can seem expensive

When it ever comes time to borrow money, a high number of different people may or may know that there can often be a number of different borrowing options. This is just one of many different reasons why no one should ever rush into applying for finance and why it is always important that they explore the different options as to what is available to them. Then no one should ever rush into applying for finance nor should they take the first thing that becomes available and disposable to them. From the financial market place these days’ people can often look to obtain both short term loans and instalment loans when a loan is required. This way people have the ability to take out a range of different loan amounts for repayments then due back over a number of different repayment terms. Credit cards I have certainly found to be another very popular borrowing option. They of course allow people the chance to pay for different items as well as withdraw cash on credit up to set limit. Below is extra information focusing mainly on short term loan borrowing.

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I myself has certainly noticed that in recent years more and more people have turned to short term loans when they need to borrow money. With these loans it is very common that people borrow small loan amounts for repayments then due back over a short period of time. It can be common that short term loans are obtained for amounts somewhere between £100 and £500 for people to then repay back the debt over a selection of different repayment terms. Any loan to then be classed as a short term loan must then be repaid back to any lender who granted the finance within a twelve month maximum period of time. Any loan that is then repaid over longer cannot be classed as that way of borrowing. These loans often provide people with cash quickly when it is needed and a payday loan is often a common way of this borrowing.

Short term loans can certainly be applied for and obtained quickly when people need usually relatively small amounts of cash. Another benefit of that way of borrowing is the fact that it helps people with bad credit get cash when it is needed. Short term loans are well known for helping people with bad credit. This can be useful for people who have their other borrowing options somewhat limited yet they need to borrow just a small amount of cash. Some financial direct payday lenders are the most likely providers of these kind of loans. They mainly aim their loans at people who have bad credit and for people who may have been declined elsewhere for finance. Now these lenders know that lending to such people can be risky as they may not repay that debt, it can then be because of this that some short term loans can then work out to be expensive.

Applying For Finance Through Direct Lenders

If anyone is needing to borrow money and has then submitted some form of financial application, they then may be curious as to what happens during their application next. This may vary of course depending on the lender that is chosen but most of them will carry out very similar checks before they reach an overall lending decision. There can certainly be a high number of different factors that can contribute to the lending decision and these will be explained below in further detail. I will also explain the three main application stages for when people are applying for loans through direct lenders.

The first part of most applications through direct lenders would be the part where a potential borrower has to input their details regarding personal information. This is when someone will be asked to fill out information regarding such things as their full name, their home address, their date of birth as well as often their employment details. They can then also be required to complete a section that asks for both their bank and their card details. All of this information will be required before any lender can reach a decision on the finance. In certain cases people can then be requested for documentation in order to get something progressed further. This can be to validate something or confirm something as requested from that lender. For instance maybe a utility bill could be requested to provide someone’s address.

Finance Through Direct Lenders

Finance Through Direct Lenders

Another common stage on every direct lenders application will be the credit check on the person applying. Any lender will have to calculate the chances of the borrower repaying the debt back once they have taken it out. They can normally have access to the person applying credit files and they can then use this information to see how they have fared with repaying other debts in their past. They will never be able to know exactly whether a person has the intentions to repay the debt but they can work out the likelihood of this being done. If someone does have bad credit and a low credit score as a result they can then possibly find it tough to get finance approved. Some direct lenders however, having said that might still be able to help them get finance.

The final stage on every financial application will of course be the final decision. This is when a borrower finds out whether or not they have been approved the finance. If they are accepted they can then often quickly liaise with the lender and see how long it will take them to obtain their short term loan or other finance type. If however, on the other hand if the person is declined then should they wish to, they can then move on elsewhere to try and get the finance approved by another lender. There can be a high number of different factors that can go into the final decision including things such as credit and affordability checks. Once the lender has reached their decision they do not have to justify it and they could just say unfortunately at the moment we as a company are unwilling to lend.

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.