Short term loans and how they can be repaid
Short term loans come in a range of different options in the modern day market place. This means there is plenty choice and flexibility for those looking to borrow only a small sum of money. For many years’ short term loans were only available via the means of a single instalment repayment term and this meant that on an agreed date, the full amount borrowed and the interest payable would need to be repaid. Although this for some was a useful resource and allowed a suitable manner in which short time borrowing could take place, for many more this was not strictly true. Over the years it has become increasingly clear that in order for short term loans to remain a worthwhile consumer resource; there needs to be plenty of choice at the disposal of applicants. This fact has been learned as a result of many years trading and many market place based changes also. The short term loans available today have therefore come a very long way; let’s try to understand this in greater detail today.
As touched upon above the first ever short term loan was one of limited options. Known by many as a ‘payday loan’, the resource being offered was rigid in its repayment options and simple to understand. Short term loans lenders would offer consumers the chance to borrow anything from £50.00 to £500.00 and this was on the understanding that they would agree to repay the entire loan and the accompanying fees on the date on which their next wages were paid. This meant that often a payday loan customer was only borrowing for a very short period of time, as little as 5 days in fact. Whilst payday loans never claimed to offer anything but this very simple form of borrowing, over the years it became clear that in many cases customers of such loans simply did not ever have the means to make the required repayment in the first place. This lead to defaulted repayments, added costs and expensive alternatives and the end result of which was a product which consumers simply did not want but had very little option but to use.
The modern day market for short term loans has completely and utterly adopted a new approach to lending for small loans. This is great news for potential customers and has effectively breathed a fresh lease of life into a very dated borrowing tool. Nowadays instead of only allowing consumers a single repayment option, lenders of short term loans lenders offer repayments via the means of instalments. This means at the point of applying consumers are presented with different repayment choices and can make a selection which they feel is best suited to them. This could mean, depending on the lender, a term of repayment from 2 months right through to 12 months for example. Lenders will also help guide borrowers to more suitable repayment choices, based on their individual finances and the loan amount being selected.