The different type of loans in the short term loans market

If you are looking to borrow a small amount of money over a short period of time you may not be aware of the most recent changes to take place within the short term loans market. Borrowing on a small scale was for many years, somewhat restricted. The market for borrowing online was introduced about 10 years ago at a time when consumers would have had to turn to more traditional resources, such as the bank, for their borrowing needs. When the internet exploded into our everyday lives so did the ability to borrow online. Suddenly like never before consumers had access to apply for loans online in a manner which was easy and discreet and did not involve a trip to the bank. As the years have passed this market for online borrowing has become increasingly popular with millions of consumers using this online resource to cover their short term borrowing requirements. With that fact in mind it is not surprising to think that lenders have also had to adapt their product to ensure it remains suited to the modern day needs of consumers. Effectively what was useful a decade ago is not always reflective of the modern day consumer and therefore changes needed to be made. The Financial Conduct Authority helped with this fact, when they were introduced as the regulating body of the market about 2 years ago. Today we will discuss in greater detail the types of loans which can be obtained from the current day short term loans market.

The classic product offered within this sector is the payday loan which the vast majority of consumers will already be familiar with. The payday loan for many years dominated the market for borrowing online and has only is recent years become the less popular of the products being offered. A payday loan gave consumers the ability to borrow in a simple manner for a set number of days. Typically lenders asked that their customers made the total repayment of the loan on their next employment pay date, meaning the term of the agreement was never much longer than 31 days. On the agreed date the customer would repay the entire loan, which of course included interest, as a lump sum repayment. Given that the loans offered in this way ranged in value from £100.00 to £500.00, this meant a total repayment in the region of £400.00.

Nowadays the market has received somewhat of a reboot and as such now offers more flexible repayment terms. This means consumers can still borrow in a manner which is discreet and easy, remaining online based but instead are presented with a range of more flexible repayment options. These type of loans are increasingly known as the new form of payday loan, when in fact, the repayments are based on instalments. Depending on your needs as an individual it is likely the lender will offer repayments over anything from a few months, up to a year, if it is suitable to do so.