There are lots of different reasons why consumers use quick payday loans. For some it may be due to the nature in which the application process can be completed; being that of an online application form. For others using quick payday loans it may be because the loan values on offer suit their short term borrowing needs. Ultimately the reason for using the resources of quick payday loans will vary from one individual to the next. That said there are several benefits which are commonly attributed to quick payday loans and today we will be discussing these in further detail.
The Benefits of Quick Payday Loans
One of the key benefits of quick payday loans is that in the clear majority of cases, the application process takes place following the completion of a simple online application form. Over the decade or so in which these loans have been available, the process of applying has only ever become increasingly stream-lined and with that, specifically designed to be consumer friendly. This means to complete the online application process will take little longer than a few minutes. The form itself is usually broken down into 2 or 3 information ‘groups’, following a logical and clear flow. Generally, this means in most cases lenders of quick payday loans will ask for personal details of the applicant, followed by employment and banking information. There will likely also be a section which requests the budget information of the applicant, for a typical calendar month.
Another benefit which relates to the ease of application is the timely manner in which lenders then aim to deliver a lending decision. Due to the small loan values being considered, the process of approval is designed to reflect this. This is not to say that the process is not planned nor extensive but at the same time lenders have developed an underwriting procedure which can be achieved in a minimal period. This is thanks to the predominate use of electronically run checks. Known commonly as a ‘Decision Engine’, many lenders can assess applicants in a quick manner electronically via its use. After the Decision Engine, has checked information such as identity, address, and banking information as well as credit, it is common that a manual ‘human’ input is only needed for the final stages before approval. Many applicants will know if they have been unsuccessful directly following the electronic checks of the Decision Engine.
One of the often most obvious benefits of quick online loans is that of the flexible loan values and repayment terms which are on offer. Whereas for many lenders within this sector only offered a single style repayment option, nowadays there are a whole host of different instalment based borrowing options at the disposal of applicants. This means often customers can choose from repayment terms starting at 2 month months and extending up to as many as 12 months for example. Coupled with loan values starting in the region of £100.00 and all amounts up to £700.00, there is plenty of choice and selection available to modern day consumers.
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
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.
If you are considering a payday loan one of the biggest things to consider is how to select the most affordable option for your own financial circumstances. This means ensuring the loan selected not only is of the right amount to satisfy the need but the repayments agreed are realistic to your own individual circumstances. So often with lending, of any size and nature, we forget to truly consider the term and commitment required to repay the money borrowed and instead focus on obtaining the money for the purchase in question. If we enter into borrowing agreements in this manner it is likely the end result will be that we may end up with a loan which we cannot afford to repay. When credit is not repaid as it is set out to be in the legally binding agreement, there can be negative impacts on our financial future. This means we may struggle to obtain credit of any nature again in the future and our Credit Reference File may also be damaged also. This is why whether it’s a payday loan or in fact, any other type of loan is it really important to consider not only whether the amount being borrowed is suitable for you but also whether the loan repayments and term are too.
In order to effectively plan for a payday loan there is in fact a very simple and effective manner. This is thanks to the humble budget planner. A budget planner allows us to quickly and clearly understand what amount in terms of a loan repayment, would be realistic to our individual finances. Budgets are used the world over by various levels of financial planning and their use for individuals is just as great. The reason why they are so insightful for payday loan planning is because it can help us to understand what type of repayment would best suit our needs; based on the amount we have spare each month. To plan a budget is actually very simple and easy to do so really there is no excuse not to do one before selecting a payday loan product. To complete your own monthly budget, you need to list all of your regular and monthly outgoings which you pay. This could therefore mean your gym membership, a mobile phone contract, rent contributions, energy bills, food costs or even a cinema card subscription; the list goes on. The key is to be accurate and honest in terms of what you pay on a regular basis. Once you have all of your outgoings listed, this amount can be deducted from your income and the end result, is your true and accurate spare income. Of course the final step is simple in that the payday loan selected, must exist comfortably and affordably within this spare income amount. Remember, your spare income is the amount you have for the entire month ahead and until such time that you receive your next monthly wages, so choose a payday loan option which does not use all of this and is therefore evidently sensible.
If anyone is ever looking to borrow finance that person must always consider a number of different things before they can then look to apply for any finance. First of all any possible borrower must know that they definitely need to borrow the money in the first place and then if so they will always have to only obtain a realistic amount and one that is affordable for the person so they can then repay the debt. The type of finance can then be chosen and here there can often be a high number of different borrowing options. Both short term loans could be available including payday loans as well as instalment loans. With the latter it is more common that people can borrow more and then they can repay the debt over a longer period of time. Credit cards are another very common way of borrowing money. Then as well as the type of borrowing being looked into the actual lender to apply through must also be chosen. There can be a number of different lenders out there and some are better than others so that is certainly something else to bear in mind.
Take payday loans as the borrowing example as still a high number of people choose this as a way to satisfy their borrowing needs. I have certainly found that in recent years it seems more and more people turn to short term loans as a borrowing type and payday loans are certainly one of the more common ways of this borrowing. With these loans in particular it can be common that people borrow amounts ranging somewhere between £100.00 to £500.00 or in some cases more can be obtained. Then with payday loans the borrower will be required to pay back the loan in full with interest added just as soon as they are paid again from their employer. Now for a high number of different people repaying any loan in full will be tough and at times it won’t be affordable for people to manage. With payday loans high interest is charged and that makes repaying these loans that extra bit tougher. These loans are often declared as being a very expensive way to borrow small loan amounts for a short period of time.
As an alternative way of short term loan borrowing a high number of different lenders can grant people a form of instalment loan. People here can borrow similar amounts to that of payday loans so up to £500 but people can then have the ability to repay back the debt over a longer repayment term. 3 month loans for example can be borrowed so people at least can spread the cost for a set number of months. With any instalment loan for it to be classed as a short term loan it has to be repaid back to the lender within a twelve month maximum time frame. Here people will then find that they can have flexibility on the loan and this can help them repay the debt at are more affordable and sensible rate. Always remember with any instalment loan product however, the longer it takes to repay the loan, the more repaid back in total.
Short term loans come in a range of different sizes and repayment terms. The modern day lender of such loans aims to deliver a resource which is not only flexible but also considerate of the realistic needs of the modern day consumer. Where things have changed in this market is fundamentally down to a new regulating body who is responsible for the overall operations of the lenders. This new regulating body is the Financial Conduct Authority (FCA) and since they were introduced a few years ago, the marketplace has been completely transformed. Not only do lenders now have to be FCA approved if they wish to offer lending options but the options they do offer need to meet the rules and regulations newly set out by the FCA. This means as consumers we can be confident that any of the lenders we consider, they will effectively have the FCA’s backing in terms of both product and service.
Terms of Short Term loans
In order to help ensure the product being offered is truly flexible, short term loans lenders offer choice when it comes to how their loans are repaid. This can be delivered thanks to the introduction of instalment based repayments. This means when applying for these sort of loans it is likely you will be presented with a selection of different repayment terms. This could mean for example, repayment split over 1, 2 or 3 months for example or could mean 3, 4 or 5 monthly instalments. Depending on the loan amount being requested it is not uncommon for short term loans lenders to offer repayment terms up to 6 months and in some cases beyond this amount of time. Quite sensibly the more that is being requested to be borrowed will result in the longer repayment terms being offered.
Take for example a £500.00 short term loans lender. Given that often short term loans are granted for average loan amounts of £300.00, a larger loan amount as with this example may mean longer repayment terms. Whereas for many of us repaying £500.00 as a single repayment, when interest is accounted for, is most likely a too costly option, making a number of pre-agreed monthly instalments at a lower rate is likely a sensible choice. Of course for those of us only looking for a £100.00 short term loans lender, it may be that we have the resources to repay this level of borrowing, with the interest payable, as a one of payment. So the term of repayment being offered by any short term loans lender will have the loan value directly in mind. As well considering the loan amount being offered, short term loans lenders will also take into account an applicant’s ability to afford the requested loan. This means viewing information available from Credit Reference Agencies as well as budgeting information supplied by the applicant at the point of applying. A collective understanding of all of this information is ultimately what allows lenders of short term loans to make an informed decision regarding any submitted application.
When it ever comes time for someone to borrow money, there may be some different people who do not know exactly what borrowing options they have. They may just not know what different options they could be entitled to and for this reason it is never wise to ever rush into applying for finance before the different options are looked into. Some finance types are certainly better than others in what they can offer to people. From the financial market place these days’ people can look to obtain both short term loans such as payday loans and instalment loans if a loan like borrowing is required. This way people can then look to borrow a selection of different loan amounts for repayments then due back over a number of different repayment terms. As well as loans people can also look to credit cards as a way to borrow money. This is another very common way to obtain finance. It can allow people the chance to pay for different items as well as for them to withdraw cash on credit up to a set limit and this is then done by the use of the card itself.
Payday Loans Often Expensive Finance
In this article I am focus solely on payday loans and other short term loans and explain what these provide to a range of different borrowers who need to obtain cash. I have certainly found that in recent years it seems more and more people have turned to this way of borrowing as a way to obtain finance when they need to. When I say this way of borrowing I mean payday loans and other short term loans. This can often be a way for someone to obtain a small cash amount of usually up to £500.00 for that person to then repay the debt back over a number of different repayment terms. For any loan however, to be classed as a short term loan it must be repaid back to the lender within a maximum time frame of twelve months. These loans are commonly known to help people get cash quickly but for a very limited period of time. Some of these short term loans can be expensive.
When people think about short term loans they will most likely start to immediately think about payday loans. Now although payday loan from payday lenders is a common short term loan when available it is certainly not the only way of short term loan borrowing. With some of the loans people can borrow the same kind of amounts than payday loans but they can then look to repay this debt over a number of months rather than clear the loan in one go which a payday loan would require. This may be a better kind of borrowing as people can get a small cash amount as before but they can then spread the cost of the debt over a repayment term that suits both them and the borrower. This will be easier than clearing the debt in one go as a payday loan would always require.
As individuals we are all subject to having a credit rating or credit score and this information is gathered and formulated thanks to the Credit Reference Agencies. Our score will be directly reflective of our previous and current performance regarding credit based commitments. Records are held for previous credit agreements for a period up to 6 years and as such how you chose to repay credit commitments of the past can have a lasting effect on your credit future. What many of us may not be aware of is the fact that even small credit agreements can and do effect our ability to obtain credit in later years; such as communication suppliers. This means even the most ‘basic’ of credit facilities will and do exist within an individual’s credit reference file. In instances where agreements of this nature have been either poorly repaid or defaulted entirely, an individual may later discover that they are unable to obtain other forms of credit; such as Hire Purchase agreements or even a mortgage. This is why it is so fundamentally important to ensure that any form of credit, large or small, is managed and repaid as it required.
Assist Short Term Loans
Whether it be a short term loans lender or a mortgage provider, all lenders will access an individual credit report before making a decision as to whether their product is suitable. Of course lenders of short term loans will be looking for a different ‘set’ of results compared to that of a mortgage provider given the sums of money being considered by each. That though, is not to say one will except ‘poor’ credit more so than the other and this is really the decision of the individual lender. Certainly as fair as mortgage providers are concerned, it would be fair to stay they are looking for examples of successful and timely repayments as fair as prior credit performance is concerned.
For consumers who are aware that previous credit commitments have been poorly managed or even defaulted through lack of repayment altogether, they may also be aware that obtaining future credit can be difficult. For consumers in this position the sensible use of short term loans may be an option worth considering. Given the fact that short term loans are generally for no more than £500.00 in value, there may be an opportunity to demonstrate you can now repay a small credit commitment as required. Using short term loans and repaying them as is requested will allow an updated ‘imprint’ on your credit reference file and furthermore may highlight to potential future lenders that you have gained experience in managing your credit based commitments in a sensible manner. Short term loans in their current form are generally flexible and therefore able to offer a number of different repayment terms; at the point of applying. So making a sensible and affordable decision concerning the right type of loan, for your individual needs is likely to be achieved with a level of ease.