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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