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.
When it comes time for a person to borrow money and they need this from the financial market place, that person may or may not know that they could be entitled to a number of different options. It is because of this reason that no one should ever rush into applying for finance nor should any person ever just simply obtain the first piece of finance that comes along their way. People have to explore the different options available and then submit any application accordingly. From the financial market place these days’ people can often look to borrow both short term and bad credit installment loans or other kinds of loan borrowing. This way people can borrow a selection of different loan values and then they can repay that debt back over a number of different terms. Credit cards are another very common way people can use to borrow finance for when it is needed. These of course allow people the chance to pay for different items as well as withdraw cash on credit up to a set limit by the use of the card itself. All of these are common ways of borrowing yet they will each have benefits as well as negatives regarding exactly what they provide to customers.
Bad Credit Installment Loans
There can often be a high number of different people who despite the fact they need to borrow finance they can have bad credit. This can then limit the number of options someone can borrow for when they need to when possible. When someone has bad credit they can often realise that obtaining finance is normally very difficult or when they are occasionally accepted people can often see that it can be very expensive. With this being said however, bad credit installment loans could still be available. Some financial lenders can often aim the finances towards people who may struggle to borrow elsewhere and have limited remaining borrowing options. These same lenders who that lending bad credit installment loans and other borrowing for these customers can be risky as they might not repay the debt. This is the reasons why some of these finance types can work out to be expensive so always bear that in mind.
When most people think about any bad credit loans they can often look start to think about payday loans borrowing. This is commonly associated with helping people borrow who have bad credit and a low credit score. Although payday loans are one of the most common types of bad credit loans they are not the only one available. Other short term and installment loans can also be obtained by people who have bad credit yet they need to borrow money. Some lenders can loan high amounts to people in these situations meaning if someone has struggled with debts in the past they can possibly consolidate the debts and then repay them at a later stage. Other people may just want a small amount of money to maybe just pay a bill perhaps and then they can repay the loans back in instalments.
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.
Short term loans come in a variety of different repayment terms and the specifics of repayment will be reflective of the amount borrowed and also the total period of repayment. Over the last few years many efforts have been made by short term loans lenders to improve flexibility and affordability amongst their lending products. For arguably too long lenders of these type of loans offered products which were very rigid and as such saw consumers agree to sizable and expensive repayment amounts over very short period of repayment. Where of course for many consumers this old style of borrowing was perfectly suitable, in the vast majority of cases this simply was not true. Instead for many years, consumers continued to turn to short term loans as a means of borrowing a small sum of money but were left with very little choice but to agree to the dated repayment options presented to them.
When the Financial Conduct Authority was appointed as the governing body responsible for the entire operations of the market, it was not long before changes started to be made. What the FCA (Financial Conduct Authority) did was set about understanding how it was that short term loans lenders currently served customers and from that, they could then understand what changes needed to be made. What the FCA quickly established was that the vast majority of lenders, either purposely or unintentionally, were not effectively supporting the short term borrowing needs of consumers. The product and service being offered was clearly dated, yet many lenders had not made changes since they began; which for some was as much as a decade earlier. This research gave the FCA a brilliant opportunity to make changes that would really count and as such, truly be able to benefit short term loans customers.
Repaid Short Term Loans
The last few years have seen a number of major changes as a result of the FCA’s appointment. First and foremost are the lenders themselves. The FCA has ensured that all current day lenders are of a certain standard thanks to the requirement for each to receive authorisation directly from the FCA in order to trade. This means that every lender must now apply to the FCA and after a review of all their practices and products, can be approved by the FCA. Those lenders who did not previously meet the required standards and did not make efforts to improve, can no longer trade under the FCA’s leadership. So not only have the practices of lenders improved under the FCA’s guidance but so too has the product which is offered. Nowadays lenders understand the importance of flexibility and this could really only mean one thing; a change in product. To ensure customers have real choice and selection lenders in the current market place no longer offer such a rigid repayment structure for their loans. Nowadays the product on offer can be repaid via instalments on a monthly basis, should the customer wish to do so and the lender deem it an affordable option for the customer.
If anyone is ever looking to apply for finance that person may or may not know that they could be entitled to a number of different options. It can be because of this reason that no one should ever rush into applying for finance and why someone must look at the number of different borrowing options they could then be accepted for. No one either should ever just simply take out the first piece of finance that comes along their way. From the financial market place these days’ people can often look to borrow both short term and instalment loans when a loan like borrowing is needed. This way people can obtain a range of different loan amounts and then repay the debt back over a number of different repayment terms. Credit cards are another very common way people use to borrow money when it is needed. These of course allow people the chance to pay for various items as well as withdraw cash on credit up to a set limit via the use of the card. Below in this article is information regarding what finances could be available for people with bad credit.
Looking for Loans for Bad Credit
It can be common that short term loans are used for people with bad credit and people who then as a result may struggle to borrow alternative finance types. I have actually found that in recent years it seems more and more people are turning to this way of borrowing when they need finance. It can be common that a short term bad credit loan can usually be obtained for amounts ranging somewhere between £100.00 and £500.00 for people to then repay the debt back over a selection of different repayment terms. For any loan to then be classed as a short term loan will have to be repaid back to the financial lenders within a maximum time frame of twelve months and any loan repaid over longer cannot be classed as this way of borrowing. This is a common loan type for people who need to borrow but have bade credit.
One of the most common types of short term loans is that of payday loans borrowing. These loans like the latter loan are normally obtained for amounts up to £500.00 however when a payday loan is borrowed it will then have to often be repaid back in full just as soon as the customer is paid again. Hence the borrowing term payday loan. Now for a high amount of different people repaying any loan in full just as soon as they are paid again on top of their other weekly and monthly bills will be tough and at times for some certain people it will not be affordable. However, having said that some people with bad credit still often take out this finance as their other borrowing options at times can somewhat be very limited. By many payday loans are just seen as a very expensive way to borrow small amounts of money for a very short period of time.
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.