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.
I think it will certainly be fair to say that there can always be a time when a person needs to borrow money. This can be down to a high amount of different reasons. Some people may then need a high amount of money as they are looking to make some form of expensive purchase of some kind. This could possibly be for a new car perhaps or maybe someone is looking to put money towards home improvements etc. There can then be others who may only need a small amount of cash. They could just need some financial help paying a bill or they need some additional funds to help make their wages last until they are next paid from their employer. Now regardless of what any person needs any amount of money for, if they have this saved they can then use it as required to pay for whatever they then need. Some people might even have enough put away through savings to pay for their requirement and need outright. Turning to savings is always nice but unfortunately it is not available for everyone and if this is then the case the money will need to be borrowed. Short term loans is just one way people use when money is needed to be borrowed.
Understanding Short Term Loan Borrowing
When most people need to borrow money the chances are first of all they will approach friends and family to see if they can get the money this way. This will be much more common for any potential borrower if only a small amount of money is needed. They will know that doing this can often enable them the chance to take out a short term loan or any kind of other borrowing interest free. This will be great as people in these cases just pay back exactly what they loaned in the first place. People here as well can get their loans quickly and then just repay back that debt as soon as they have the required funds available again. This as a borrowing option is just like turning to potential savings as it is not available for everyone.
If people ever need money due to have a small amount of funds in need of a cash emergency for example then using a short term loan may be the better option. Some many different lenders provide these as a borrowing option. Payday lenders will most likely however, be the source that provides this finance. They aim their financial products towards people with bad credit as these are often obtained by people who have other borrowing options limited. It can often provide people with loan amounts up to £500.00 for the same people to then repay the debt over a short period of time hence the term short term loan. Never is the loan ever under any circumstances to be used as a long term borrowing option. People have to then repay back the finance within a time frame of up to twelve months.
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.
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.
Payday loans are a means for borrowing between £100.00 and £500.00 typically and the application process in the vast majority of cases takes place online. This means that lenders will assess the suitability of the loan in the most part by electronic means. Generally speaking it is the attention of payday loans lenders to deliver a service which is flexible, discreet and timely, with most lenders being able to make a lending decision the same working day the application is submitted. It is important to realise that lenders will not place speed as the uppermost important factor and therefore will not progress an application simply based on this. Instead modern day payday loans lenders will focus their efforts on making sensible and affordable lending decisions for their customers. Let’s look at the process of applying for payday loans, in greater detail, to understand then exactly how this generally achieved.
Payday loans as mentioned above are accessible via the means of an online based application process. To apply for a loan a lender will offer an online based application form which can be completed usually in little longer than 10 minutes. Typically speaking the application form itself will be broken down into a number of clear and logical steps, designed to gather all the key information regarding the applicant to make an informed lending decision. These sections usually focus around personal information, employment details and banking information. By gathering this information it allows the lender to run a series of automated checks to assess whether the requested loan can be deemed as suitable. These automated checks are completed via the means of what is commonly known as a ‘decision engine’. A decision engine assesses the identity, address, banking information and credit worthiness of an applicant. It will seek to verify the personal information of the applicant and then assess the credit worthiness against the individual payday loans lenders individual criteria. If at this stage any of the lenders requirements are not met, there is a high probability that the application will be declined.
Application Process for Payday Loans
In most cases once the decision engine has completed its checks and in essence the application has been provisionally accepted by the lender. At this point the lender will likely manually review the application to ensure all the information contained is as they would require. At this stage there may be a requirement for the applicant to provide additional documentation to support the application. Additional documentation is usually requested when an automated check has highlighted a need to verify some of the information relating to either identity, address or even employment. In some cases there will not be a need to provide any form of documentation in order for the payday loans lender to make their decision. Providing the lender is satisfied all of their electronic and manual checks have been successfully passed, it is at this point that the lender will have the ability to approve the loan and transfer the funds, usually via faster payment, to the account nominated in the application.
Thankfully nowadays payday loans come in lots of different shapes and sizes and this means as consumers, we have plenty of choice and flexibility at our disposal. Whether we are looking to borrow £100.00 until pay day or £500.00 for a longer period of time, there is likely to be an option to fit the need. Payday loans are not designed to be used all the time and instead are most effective when used as intended; for short periods of time. The name given to these type of loans is not coincidence and in fact the name ‘payday loans’ is very finding for the type of product on offer. Payday loans do what the name suggests and allows us to borrow until our pay date in simple terms. With this in mind it is easy to see how they vary from more traditional ways of borrowing money. Take for example a bank loan, available from a host of different high street banks, these can often be offered to consumers over a number of years’ worth of repayment and furthermore can reach values way up into the thousands of pounds. Clearly consumers needing to borrow these sort of sums would not benefit from the resources offered by payday loan lenders.
Best Repayment Term for Payday Loan
One of the most important considerations before taking a form of payday loan is whether the reason for borrowing matches the resource which is ability. As discussed above payday loans are not designed to be used as an on-going resource and therefore will not be useful to all consumer needs. Instead if you are looking to cover a short term financial short fall, payday loans can prove to be a useful resource. Take for example a broken washing machine or the requirement for a new car tyre. These are the type of costs which can arise from time to time but will not continue to be a financial concern month in and month out. If, however, there is a financial cost which is likely to occur regularly, it would be more suitable to consider the resources of a larger and longer term loan product; for example, a credit card provider.
So assuming there is suitable reason for borrowing, matching that of the resources offered by payday loan lenders, it is next important to select a repayment term which is sensible and realistic. This means not over-committing yourself financially in terms of the repayment amount agreed to. Given that payday loans can be repaid in a number of ways, there is plenty of different ways in which the repayment amount can be amended to fit your budget. Payday loans are often offered over a range of terms, whether this be 3, 5 or 6-month repayment terms or 1, 2 or 3-month repayment options for example. This means the repayment amount can be increased or decreased on a monthly period depending on the overall period of repayment which is decided upon. Therefore, it is very important to review the options and make an informed lending decision.