Understanding Online Payday Loans

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The ability to borrow money for a short term online is now a powerful resource and one which is varied depending on the lender. The market for borrowing in this manner was first introduced about a decade ago and quickly became popular thanks to its ability to deliver a small loan via an online application. The rise of the internet and its integration into our everyday lives meant consumers quickly took to this resource like so many other online resources which are now available. Online payday loans are therefore a familiar resource for many consumers. In fact there are now not many consumers who are not aware of these type of product and the service they offer. That said the market has changed quite a lot over the years, the product presented today is very different to that which was offered by lenders in years gone by. As a result consumers who previously used the market may be surprised by what they find visiting it today. The product now being offered by online payday loans lenders is more flexible and better regulated than ever before and consumers should therefore feel comfortable and better able to borrow from this market as required.

In the early days of lending online payday loans lenders concentrated their efforts on the speed in which they could deliver their service. This meant designing and offering a product which was clear and easy to understand. Given that the entire application could be completed online, without the need to always speak to the lender, consumers felt the product was discreet and therefore convenient. The product being offered was very clear and allowed consumers the opportunity to borrow the agreed funds until their next employment pay date. This meant upon approval the funds would be immediately transferred to the agreed bank account and the customer then agreed to repay the loan on their next pay date. As a result of this the total term of these type of loans was rarely any longer than 31 days. The interest applicable for this more traditional style of payday loan was typically charged at a rate of £30.00 per each £100.00 which was borrowed by the customer. As a result of this a customer borrowing £100.00 could expect to repay £130.00 in total. (Editor - This example shows what the rates would likely have been before the FCA rate cap was introduced now the maximum would be £24.00 per £100 per 30 day period)

As time passed it became more and more clear that in fact this style of borrowing was not always realistically affordable to the customers who were using the loans. In fact many who borrowed in this more traditional manner found that the concept of a lump sum repayment was too costly and they turned to the lenders for an alternative repayment. At the time lenders offered borrowers the option to extend their loan instead. An extension allowed the lump sum to be avoid be repaying only the interest on the agreed date. In the case of a £100.00 loan this meant a repayment of £30.00. Of course although this payment avoided a lump sum needing to be paid, the total amount repayment remained the responsibility of the borrower. This meant on their subsequent employment pay date £130.00 was still payable. As a result it became clear that in fact extensions did not really address the true issue which was being faced by consumers.

As the years passed this issue became more and more clear and lenders as a whole needed to act accordingly to ensure their product remained suitable for the market they were aiming to serve. As a result online payday loans changed. Nowadays instalment loans are the product which is now often offered by online payday loans lenders. This means as consumers we have a much better selection of choice. Instead of having to repay the loan as a one-off repayment, consumers can make a selection from a number of terms. Many lenders are now offering the opportunity to repay the loans they offer over 3, 6, 9 or even 12 months. This means as consumers we are much better able to find a repayment term and amount which is more affordable.

Often the problem with these type of loans is the fact that the terms agreed to, in realistic terms, are simply not affordable to us. The introduction of instalment based products means we ctake products which works with our existing commitments rather than against them. This fact alone makes these type of short term loans far more suitable for consumers as a whole.

Loans Online

The good old days of strolling down the high street and popping into Welcome Finance or other loans companies to get a loan are long gone. Not least because Welcome Finance went bust! I guess you could pop into your local Barclays or RBS and request a loan over, say, 6 months and expect them to be interested. I suspect that the bank would kindly refuse you and send you on your way. But where are you expected to go to borrow a few hundred quid for a few months?

Today it seems that in order to communicate with the financial companies of the UK you have to go online, go onto the big bad, and sometimes scary world of the internet. The world where there is so many press articles about crooks and fraud and phishing that the average person is probably nervous about reading the ”Mail On Line” yet alone applying for a loan. Yet today thousands of people get their Loans Online and are very happy with the process. It is really difficult to get real statistics about how many people get their Loans Online, but I know from an online instalment loans company that they are offered in excess of 5,000 applications from consumers per day! That is almost 2,000,000 per year. So it is pretty safe to assume that more than this number use the interest to search and find loans.

The issue of security is always a concern when going online, let alone when you are handing over sensitive information such as personal details, bank details and credit card and debit card details, yet all of this information is need to apply for a loan from an online company. Those 5,000 applicants per day for the instalment loans would all have to provide very personal details to apply for the loan, yet none of these people really know the loans company, they just see their pretty looking website and decide that they would like a loan form them and away they go, providing sufficient information to satisfy the loans company or provide a fraudster with so much information that they could steal the applicants identity in a flash.

Should we be worried? Yes I think we should be worried; but what should we do? We shoudl conduct very thorough research into the lender BEFORE we enter ANY personal details online.

Understanding payday loans online

Many consumers are aware of payday loans online and the product which is offered by lenders. Although the ability to borrow online has been available for many years, there has been changed made in the last few years which now means there is a broader selection offered by existing lenders. The market as a whole has adapted in many respects to ensure the type of product being offered is better able to meet the current needs of consumers effectively. True Blue Loans understands the important of not only delivering a loan which is fuss free but also believes in the important of choice and flexibility, given the needs of consumers can of course vary. In order to understand this fully True Blue Loans has an application process designed to capture the information required to make an informed lending decision and has a team of experienced Underwriters who will review the information and communicate with our customers wherever necessary to do so.

Payday loans online used to predominately mean a singular repayment term loan which meant customers would repay the amount borrowed on the agreed date, in full with any interest which was applicable at the time. Of course these type of loans meant the customer committing to a lump sum repayment. As the years have passed it has been recognised that payday loans online should offer more choice and most importantly flexibility. At True Blue Loans we share this belief and value and this is the reason why we offer a selection of repayment terms. Offering loans over a period of 3 months, 5 months or 6 months. As a True Blue Loans customer you can make the decision as to the term of repayment which is based suited to your needs. The interest applicable is calculated on a daily basis which means the total amount repayable is reflective of the period of time selected. At True Blue Loans we believe you should make your selection based on what is realistically affordable and therefore the selection made should consider the other elements of your monthly budget. If you would like any guidance or additional information relating to this our team of customer support staff are always happy and able to assist you. You shoudl always be aware however that the longer you take teh loan over the more it will cost overall.

The changes to payday loans online now means there are instalment based products which exist alongside the original payday loan product so consumers have more choices when selecting a online borrowing solution which is suitable to their individual needs. In order to establish the most suitable product and of course lender we would advise you take the time to read all the information the lender presents to you in terms of their product and the service they offer. Like at True Blue Loans, we encourage you to ask any questions you may have at any point of the application, to help ensure you make a decision which is completely suitable to you. Often lenders will give examples of different terms and this tool can be used as part of the decision making process.