How Payday Loan Lenders Compare to Other Borrowing Options

Payday loan lenders give consumers the ability to borrow small sums of money over pre-agreed short periods of repayment. The loans which are available are not suitable to all and like any form of borrowing this will depend on the individual circumstances of the applicant and also the criteria of the individual payday loan lenders. Today we will be looking at how the resources offered by payday loan lenders compare to other forms of borrowing which are available. These loans were first made available to consumers over a decade ago and there were introduced at a time when short term borrowing was still a much unheard of concept. Although consumers had the ability to access small loans via the means of high street providers, typically these sources were in exchange for goods and therefore not always suitable. The introduction of payday loan lenders online meant that consumers now had the ability to apply for small loans via online application forms and in turn receive a timely decision as to the outcome of their application.

Payday Loan Lenders Compare

Over the years the terms of repayment for such loans have become more flexible and in today’s market consumers have the ability to borrow over periods of one single month up to as many as 12 monthly instalments. The loans themselves come in a number of different values with payday loan lenders available to offer loans from £50.00 upwards. In most cases these loans do not exceed £500.00 and are normally in the region of £300.00 taking an average. As it can be gathered from this information these loans are designed to allow access to small sums of borrowing and do not require a lengthy repayment period if used as intended. It would therefore be sensible to surmise that these loans are not able to assist all financial needs of consumers; especially those who require larger and longer term borrowing. It is for this reason that payday loan lenders and their loans are most often cited for their ability to help with unexpected and short term costs which present themselves from time to time. Whether this be a broken washing machine or a vet bill or a last minute school trip for example, these are all costs which require attention on are not going to need on-going financial support.

Of course there are several different ways of borrowing money which exist within the financial sector and like short term loans, not all of them are suitable for all needs. As well as credit card providers there are also Hire Purchase agreements and bank funding to be considered. In instances where a greater loan value is needed, to cover a larger cost it is likely a short term loan would be less suitable then say for example, a credit card provider. The key is matching the resource to the need and in doing so ensuring that the loan amount borrowed and the subsequent repayment due, are sensible and affordable to the individual applicant.