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. |
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