Installment loans are a relatively new addition to the online short term loans marketplace. This is because for many years a different type of small loan dominated the market and was the go-to choice among-st consumers. As many of us will be aware this product was that of the payday loan. The payday loan until installment loans is a much more restricted method of borrowing a small sum of money and hence the reason for many modern-day consumers preferring the services offered by installment loans lenders. The transition from lenders offering purely payday loan products to installment loans took place when the market as a whole began to change. The introduction of the FCA (financial Conduct Authority) signalled a change in direct and approach for lenders of these short term borrowing choices and this was thanks to the work and research conducted by the FCA. The FCA set about the task of improving the entire market in which short term borrowing took place. Specifically these loans were defined as ‘short term, high cost’ borrowing options. Where for a decade before that time payday loans had dominated the market in terms of product offering, the FCA through their research recognised that for many consumers the payday model had become dated. Not only was the payday model considered to be dated but in reality it was also restricted and unable to support the true needs of short term borrowers. This was due to the fact that payday loans, unlike installment loans, were due for repayment in a single and one-off repayment. This meant when applying for such a loan the customer would agree to repay the entire loan and the interest charged by the lender as a one-off lump sum; often due to lack of alternative repayment options.
All of the above meant that many consumers applied for and were approved payday loans when realistically, they did not have the means to repay the commitment later due. The FCA recognised this fact and set out establishing new guidelines as well as rules which would guide lenders to offering more affordable and customer focused borrowing choices. The end result was the birth of installment loans. Installment loans in a generally sense have been much better received by customers and the FCA alike. Instead of asking that the customer commit to what was often a sizable sum of money on their next employment pay date, installment loans give customers choice and flexibility. This is thanks to their range of repayment terms and options which are presented to the customer at the point of applying. This means there are borrowing choices which allow for a whole host of different repayment terms. Whether this means 3 monthly repayments or 5, 6 or even 8 months’ worth of repayment for example. The key point here is that at the point of applying customers considering installment loans have the freedom to select a repayment term and therefore payment which is sensible and realistic to their individual financial circumstances.
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If anyone is out there looking to borrow and they are looking to do this from the financial market place, if they are looking to make some form of application they may be keen to know exactly what this entails. People may want to know what details they will most likely need in order to make an application but also what that application process is. Someone may want to know also what happens from when they first hit submit on the application to then when they get their final decision on the finance. It will not matter whether someone is looking to apply for short term or installment loans, credit cards or even mail orders the application process can often be very similar. Below is three different steps when applying for any kind of finance. An early part of any application process will be the section when the applicant will have to fill out details regarding themselves. They can be required to complete information on their full name, home address, contact details including home mobile as well as work contact numbers, Their date of birth can also be requested as can both their bank account and card information. All of this information will then be verified by the lender before they can then make a decision on the borrowing. In some cases documentation can be required to often finalise installment loans or other finance and a couple of examples here could be a driver’s license being requested or a possible bank statement among other things.
When any financial lender is looking to consider the applicant they will often credit check that person before they can proceed. The lenders will have to see if they can calculate the chances of any person repaying a loan should they obtain it. Most lenders when doing this check can often see how any potential customer has fared with repaying the other obtained finance previously over a number of years. Someone with good credit then is far more likely to get approved for installment loans and other borrowing than someone would if they have bad credit and if they have struggled to repay other debts in their past. Having just said that however, some lenders however including payday lenders can often look to loan to people even if they have bad credit and as a result they have limited other borrowing options. The final step on any financial application will then of course be the lenders final decision. This is when the customer finds out whether or not they have been approved for their application. If they are declined then should they wish to they can then move on to other avenues to try to get the money that way. If on the other hand they are accepted they can then look to liaise with the lender directly and see how long it will take before they can receive the money for their loan. As shows in this article there can be a number of factors that go into a lenders decision. Once it has been made then it is unlikely to change and also the lenders do not have to give their reasons as to how they reached the final outcome. When it ever comes time for anyone to ever borrow money that person may or may not know that they could be entitled to a high number of different borrowing options. It is safe to say the only way of being able to borrow is through your local banking branch and the manager there has now well and truly gone. It is not because of the different borrowing options that no one should ever rush into applying for finance nor should anyone ever just simply look to obtain 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 as well as online installment loans if a loan like borrowing is required. This way people then have the ability to borrow a range of different loan amounts for repayments then due back over a number of different repayment terms. Credit cards are another common way people tend to borrow finance and these of course allow people the chance to pay for different items as well as withdrawing cash on credit up to a set limit. All of the above are very common ways people use to borrow money yet each of them will have both positives as well as negative factors regarding exactly what they offer. It can this can lead to people looking further into their borrowing options and then submitting the application then accordingly. The most common way people use is online installment loans. This is a very popular way to obtain a range of different finance types. A mortgage for example is a type of this borrowing and just by this finance people can then see how many people from all over the world have had an installment loan in the past or they currently could have one outstanding these days. The online installment loans can vary as they allow people the chance to borrow from as little as say £100.00 for repayments over a small time scale whereas, some people can borrow many thousand and then these people can repay over many years.
Along with the flexibility on the finance installment loans provide they also have ever benefits once they have been obtained. It is common these days that some online installment loans can even be applied for and then when possible taken out by people with bad credit. This gives people who may have limited other borrowing options the chance to take out loans when they need to. Some lenders such as payday lenders actually aim what they offer in terms of finance towards such potential borrowers. Another benefit of using installment loans is the fact that they can often provide people cash quickly for when it is needed. People have the ability to apply for this finance online or occasionally over the phone through a quick and simple process of just a number of minutes. Once that application is then accepted from different lenders, it is likely that person will then receive their cash loan that very same day. If anyone is out there and they are ever looking to borrow money and from the financial market place, if they then have submitted any form of application they may then wish to know exactly what happens next. Someone may want to know exactly what happens and what the steps are from when they hit apply now on an application to then when they get their lending decision. It will not matter whether a person is looking to apply for finance via possible short term loans online, installment loans for possibly higher amounts or even credit cards the application process can often be very similar. Below are three common stages that will occur on financial applications. An early part a short term loans online application will most likely be a section on when a person has to input their details regarding their personal details. Here they can often be requested to fill out details regarding their name, address, date of birth, and their contact numbers that will often include all home, mobile and work numbers. It can often be common that someone will also have to supply both their bank and card information on the application as well. All the information used during this process will then be reviewed and confirmed with the lender before they can look to make their lending decision. Some companies may then request information to support this stage on the application. A couple of examples here could possibly be a bank statement or a driver’s license etc.
When an application is made for short term loans online or other borrowing such as payday loans, the chances are the lenders will carry out sometimes in detail a credit check. Any lender will always need to calculate the chances of someone repaying a loan should they take it out. It is common that when reviewing an applicant’s application they can see how that person has fared with their other debts over a number of years. It is then very common that someone with good credit and a decent payment history will be far more likely to be approved the finance than someone who has previously struggled with other debts and as a result they have a low credit score. Having said that, some lenders including payday lenders may still be able to help people with bad credit borrow finance. The final stage on any financial application will then be the lenders final decision. This is of course when a person finds out whether or not they have been approved for the finance. If someone has been declined then should they wish to they can then just move on elsewhere to try to get the money approved there. If on the other hand they have been approved then the borrower can then look to liaise with the lender and see how long it will be before they are then paid their loan. As shown during this article there can often be a high number of different factors that go into the final lending decision. Once it has been made it will unlikely change and any lender will not have to ever justify their decision. I cannot begin to stress enough at just how important affordability is for when it comes to finance and borrowing money in particular. If a financial product is obtained but is then not affordable then the chances are the payments will be missed. Missing such requirements can often have severe negative consequences for that person and most people will then often be keen to avoid this from ever happening. It will not matter whether someone is looking to borrow short term payday loans, installment loans for probably higher loan amounts or even credit cards they have to be repaid back as agreed with the lender but in order for this to happen they have to always be affordable. Below is a helpful tip that can be useful to check affordability on finance and there will also be information on how some borrowing is more realistic for people to repay than others. I have found that a good way to test if finance is affordable on short term payday loans and other borrowing would be for someone to locate what on average their disposable income is. This could vary from month to month but it still should give people a clear understanding as to whether finance is affordable. People use the disposable income amount to see if they can afford to have set amounts deducted from their spare income regarding any future borrowing they may obtain. People can locate this income amount by looking to any month ahead and then adding all their income expected for that period of time. This can include their wages from work plus any benefits or credits they are due for that period etc. Then from that amount the same person over the same time frame can then deduct all their expenditure. This can then include their rent costs, any debts they may have as well as other expenditure required such as basic transport and food costs for example. The amount left over for that person is the disposable/spare income. If that amount is then the chances are the finance is affordable however, if low or if it does cover a set payment to become due then no application can then ever be made.
It can be common that some ways of borrowing are more affordable and then realistic for people to repay than others. Take payday loans as the borrowing option, when these are borrowed people have to repay the debts back in full with relatively high interest just as soon as they are paid again from their employer. Now for a high number of different people repaying any loan back in full will be tough and at times it won’t be affordable. Here other short term loans can then help including short term payday loans. These can be obtained for the same kind of amounts of usually up to £500.00 but then rather than repaying the debt in one go on their next payday people can often spread the cost of the debt. This has to be the better option as it is more affordable product that is easier to repay albeit more may overall be repaid back to the lender in total. I can never explain enough at how important budgeting and affordability is when it comes to borrowing finance. This is a key element for people being able to borrow finance and then repay the loan as agreed and how they should. If any of the finance is not affordable then the repayments can be missed which can often then lead to severe negative consequences for the person involved. It will never matter whether someone borrowers short term or online installment loans or even credit cards affordability is always going to be very important. Below in this article is a commonly used way that someone can use to see if finance is affordable and also how some borrowing is better for people to repay than others. I have always found a good way to test if online installment loans as well as other borrowing are affordable would be for a person to locate on average what their disposable income is on a monthly basis. People can use this figure to see if they are able to deduct what they are required to pay for finance to make sure it is affordable. This amount of income can potentially change from month to month however; it still should always give an indication as to whether finance is affordable for someone to manage. People locate the disposable income by looking to any month coming ahead then adding up all the income expected for that period of time. This can include their wages, any benefits or credits due etc. Then from that amount the same person over the same time frame can deduct their expenditure to. The deductions could include rent/mortgage payments, any debts someone may have as well as basic food and frequent transport costs etc. The amount left after the total calculation is the disposable income. Now if that amount is high then the changes are the finance is affordable however, if low or if it does not cover any payment that may become due then no application should then be made at any stage. It is common that some borrowing types will be more affordable and realistic for someone to pay for than what others can offer. Take payday loans as a type of finance, this when obtained must be repaid back to the lender in full with high interest just as soon as the customer is paid again from their work employer. Repaying any loan in full as well as maintaining other financial commitments can be tough for certain people and it will not be affordable for everyone. Here then perhaps online installment loans can then help. Here people can often borrow similar amounts to that of payday loans but then people can repay these debts via instalments over a term that suits them. This will then make it more affordable and realistic for a person to repay. Always remember that with any online installment loans borrowing, the longer it takes for a person to repay the loan, the more overall repaid in total back to the lenders.
I cannot even begin to stress quite enough at just how important affordability is on finance. People have to always one hundred percent made sure that when a set amount is borrowed it has to be repaid as agreed with the lender before any finance is approved and funded. Failing to make repayments on the debts can often lead to severe negative consequences for that person involved and most people will then always be keen to avoid that from ever happening. It will not matter whether short term personal loans are borrowed, credit cards or even mail orders or other home lending the debt has to be affordable and then paid back. Below is extra information regarding how people can start to budget for such finance types? I have found that a good way to budget for finance would be for a person to locate what on average their disposable income is and then use this amount to see if any financial commitments if taken on can be deducted from this figure. Most people will know that the disposable/spare income can often change from the month however; this should still give someone an understanding as to whether finance is affordable. People locate the amount by looking to any month ahead and then adding up all their income expected for that period of time. This can include work salary plus any credit and benefits a person is due to receive. Then from that amount the same person over the same time frame can deduct the expenditure expected. This in turn can include rent costs, transport and food costs, any debts someone has and other bills etc. Then after the full calculation has been done the amount left over is the person’s spare income. Now if this is amount is then the short term personal loans or other borrowing is most likely going to be affordable however, if on the other hand it is a low figure or if it does not cover what would be due for the finance then no application should then be made.
It is very common that some borrowing types are more affordable than others and this is certainly something else any borrower must consider. It can be common that short term personal loans are provided to people usually for relatively small amounts probably up to £500.00 for people to then repay the debts over a short repayment term but via most likely high installments. Take payday loans as this is a common type of this borrowing. These when obtained are repaid back in full just as soon as a customer is paid again from their employer. Repaying any loan in full can be tough and for certain people it is not affordable. Other short term personal loans could be installment loans. These when borrowed can be done so for similar amounts to payday loans or also higher values but then people have the ability to repay these loans over longer periods of time. This can mean that they are easier and more affordable for someone to repay. When it comes time for a person to borrow money 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 and why they must explore all the different borrowing options before making an application. It is definitely now fair to say that the only way of being able to borrow is through the local bank and the manger there has nowadays well and truly gone. From the financial market place these days’ people can often look to borrow both payday loans and other short term loans when a little amount of money is required. Installment loans is a common alternative and here people can often look to borrow higher loan amounts over a longer time frame than what can be offered on the other kind of loans above. Credit cards are another common way to borrow money and these of course allow people the chance to pay for different items on credit. Below is extra information regarding payday loans and how these can often work out to be expensive. In recent years I have found that more and more people are turning to short term loans for when they need to borrowing. These are designed to help people over as the name would suggest short term periods. They can often be used as an emergency way to borrow and never should short term loans such as payday loans be used as a long term financial borrowing option. With the finance it is common that people can look to obtain amounts up to £500.00 for people to then repay the debt back over a limited period of time. When most people think about these so called short term loans they start to immediately think about payday loans and that is because these are the most common ways of that type of borrowing. It is common that payday and other short term loans are out there to offer loans to people who have bad credit and may therefore have limited other borrowing options as a result.
Payday loans fall under the short term loan category as that term short term is a loan that is repaid back to the financial lenders within a twelve month maximum time frame. Any finance repaid over longer than twelve months cannot be classed as that type of borrowing. When a payday loan is borrowed it is then repaid back in full to the lender just as soon as the borrower is paid again from work hence the term payday loan. It is also common that high interest is charged on any amount of money that is borrowed. Now repaying any loan in full as well as maintaining other possible financial commitments can be tough for a high number of us to manage and the fact high interest is charged makes them even harder to repay. Always bear this is mind when considering payday loans as a borrowing options. They are also by many seen as an expensive way to borrow small amounts of money for a very short period of time. When applying for a short term loan there are a number of different stages which will need to be completed before a lending decision can be made. These stages are designed to ensure that the loan requested is suitable and affordable and in doing so avoid granting loans which are not financially suitable. Short term loans like all other forms of borrowing are accessible via the means of a legally binding loan agreement and therefore should not be entered into lightly. As we would with a new credit card, bank loan or Hire Purchase agreement, when it comes to short term loans we should be sensibly considering the options which are available and then making an informed decision. Providing it is decided, through research, that short term loans are the most suitable choice, the application process is actually very simple and straight forward and details of which we will discuss in greater detail here today. Firstly, let’s look at a brief summary of the type of loans which are available from short term loans lenders. Short term loans, as the name suggests, give the facility to access a small sum of money as a loan, usually in the region of £300.00. The terms of repayment are considered flexible, given the fact that many lenders offer instalment based borrowing. This means repayments can be spread over a number of months, the term of which is selected at the point of applying. Depending on the loan value and the lender terms typically range from a single payment (also known as a payday loan) and extend right through to as many as 6 months in most cases. This means whether an individual wants to borrow £250.00 over 3 months or £300.00 over 6 months, there is likely to be a lending option to meet the need.
To apply for a short term loan, the application will almost always be via an online application form. This means the process can be completed with any internet enabled device, whether that be a tablet, mobile or laptop. These application forms have been developed over time so usually their clear and simple nature means they can be filled out and submitted in as little as 5 minutes. It is absolutely vital that the information supplied is accurate and up to date, as supplying incorrect or out-dated information will almost certainly result in the application being declined. Once the application is fully completed and submitted the lender will immediately run the application through what is known as a ‘decision engine’. The decision engine is a combination of all the electronic checks required to be completed by the lender and will decide if the application can be progressed any further. Providing this stage is passed it is likely then that most lenders will then undertake a manual review of the application, to ensure nothing has been ‘missed’ and furthermore if any additional checks need to be completed. It is only once all these checks have been passed as required that the lender will be able to grant the short term loans resource requested. As many of us are aware one of the preferred choices for borrowing a small sum of money are via the means of online short term loans. Given the online nature of these loans many consumers find them to be the most suitable choice, given their discreet and simple nature. Short term loans in a general sense have been available online for over a decade in fact and as such the vast majority of consumers are aware of the product and service being offered. Over the years this market has changed quite considerably and nowadays the lenders who operate are not, in the majority of cases, the same lenders who for many years occupied the market. This fact can be attributed to the fact that over the years the manner in which these loans are offered has completely changed and as such, many short term loans lenders have in recent years left the market place altogether. A change in consumer needs and spending habits has meant that the originally offered type of short term loan became a dated and un-needed product. Those lenders, who either did not want to change or refused to, are in the most part now gone from the market entirely. A change to who regulates the market coupled with changing consumer needs has meant in recent years the entire market place has had to transform. Nowadays the modern day consumer has become increasingly used to using credit as part of everyday life and as such, no longer favours the option of making a lump sum repayment to pay for goods and services. Instead consumers have become used to using credit cards, home lending products and store credit to name a few of the examples which are available. What this fundamentally means is that consumers prefer and have become adapted to making monthly repayments for the goods and services they buy. Take for example home furnishing, often instead of paying for these outright consumers will take advance of credit based facilities which are frequently offered instead, meaning a manageable monthly repayment replaces the need to pay out a sizable sum of money. These changes in consumer spending habits have been coupled with the introduction of a new regulating body, responsible for the entire operations of the short term loans market. The regulator in question is the FCA (Financial Conduct Authority) it has been their role over the last few years to improve the product and practices of short term loans lenders.
What the FCA did was to place rules in place which would guide those lenders committed to effectively supporting the short term borrowing needs of consumers. These rules allowed lenders to create a more flexible and customer friendly borrowing environment and those lenders who did not wish to modernise their practices did not receive the approval needed from the FCA to continue trading. This means that the modern day market is populated by only FCA approved lenders of short term loans and as such potential borrowers have this security and confidence firmly in mind. The product itself has moved away from the restrictions of old and no longer demands sizable one-off repayments to be made in order to repay the resource. Instead todays loans and the lenders who offer them offer a flexible borrowing resource and this is thanks largely to the introduction of instalment based borrowing. Short term loans in their current form then, have not only the FCA’s requirements in mind but also the modern day spending habits of consumers as we have discussed above. Those of us considering short term loans can therefore expect to find a market which offers flexibility and furthermore, choice. This is because nowadays the lenders operating in this online market offer consumers instalment based borrowing which allows the borrower to make a choice with regards to their preferred instalment amount. This could therefore mean making a selection from 2, 3 or 4 monthly instalments or perhaps 3, 5 or 6 monthly repayments for example. The key point here is that lenders are actively demonstrating their willingness to give realistic and consumer friendly borrowing choices. Some lenders will only offer a specific term of repayment, perhaps meaning a 3 month repayment term for a range of different loan values, however, in the majority of cases there are several different options to choose from. These instalment based loans are quickly becoming the choice most regularly selected by short term loans borrowers and the days of single repayment borrowing is quickly becoming a thing of the past. |
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