When payday is just a little bit too far away – there’s always the option of small payday loans
Payday loans are predominantly small – they are designed to fix a short term need for a relatively small cash amount until payday arrives, but just how do these small payday loans fit into the market that has always been dominated by the big player offering much larger amounts over significantly longer periods.
If you read the sales literature and advertising material of the banks and other institutions that offer conventional loans, the examples given are normally calculated on the basis of the borrower taking out a loan for thousands, or even tens of thousands, rather than a few hundred pounds. Not only are the amounts quite large, the repayment periods are quite long, 3 to 5 years being quite normal.
These lenders are not interested in short term propositions so they do not really have a viable alternative to these small online loans. The administration, staffing and other costs involved in marketing, selling and managing such small debts far outweigh the benefits of offering them.
The banks do have the products but they don’t offer them to everyone
Instead, they hope that you will apply for one of their nice shiny credit cards and use that to spread the cost of the emergency or unexpected expense, often over a very long period of time with the result that the interest payment just keep on growing and growing. Although small loans started out life as 1 month loans, many lenders now offer them over longer terms; 3 months, 6 months, 12 months and 24 month loans are now available, which means they’re in direct competition for credit cards.
The plus point with this arrangement is that the end is very much in sight and the debt cannot simply be rolled over again and again until it becomes a very large and unaffordable one. With a credit card however, the ability to make just a minimum payment enables a debt to just carry on and on without ever getting reduced or indeed paid off in full.
The banks don’t want your business so where can you turn?
So, if we accept that banks do not really cater for the payday loans market, what other options are there? The answer is, surprisingly few really. There is a new breed of pawnbroker springing up in the high street and they will make payday loans available against the security of something that you have that has some value but in the main the sums on offer are quite small and no one likes to be parted from their possessions in that way unless they have absolutely no choice.
Some of these firms have managed to scale-up their operations into national concerns and offer the benefit of having branches on the high street into which you can go to get an offer of a loan, just like making a purchase from any high street shop. Others, like Cash Converters, have turned this process into something akin to a supermarket where you can buy or sell goods at will.
Although these are a solution for many, especially those who are lucky enough to have something valuable enough to sell or lodge as security against a loan, many people do not have the option as they do not own anything of sufficient value to cover the size of loan that they need. In such cases the only options open are those involving a loan, probably payday loans, of some kind.
Let your fingers find the small loans companies online
It is fortunate that, in an age where most of the UK’s 63.2 million population have some kind of Internet access, short-term loans, can be researched and applied for online, making it super-easy to find lenders who provide small payday loans quickly and easily. Whereas just a few years ago it would have been necessary to spend ages on the telephone making the arrangements, it is now it is no longer the case.
Modern, secure and private web browsing software has changed all of that and it is not only much quicker, but far more secure, to carry out such transactions totally online and usually without the need to speak to anyone. Loans processed online, with an instant online decision, are now the favoured choice for many.
Rest assured, the provision of payday loans is suitably regulated
The online payday loans providers that you can access for yourself, without paying any arrangement fees or other such charges, have built their entire businesses around the online model and, because they are regulated by the Financial Conduct Authority (FCA), you can be sure that the service they offer is operated to a high standard. The FCA looks after your interests when it comes to ensuring that the small payday loans being offered are made available in a fair and reliable way.