Lending Stream Loans

As many of us are aware the market for short term loans have changed quite dramatically in the last few years. There has been a clear shift in not only the product being offered by lenders but also the approach being taken by remaining lenders. By saying ‘remaining’ lenders I am also highlighting the fact that many of the lenders who once existed in this market are now no more. Although online short term loans have been available for 10 plus years, the road has not always been a smooth one. The original product offered by many lenders was gradually highlighted for its flaws and restrictions when it come to offering the best possible lending solution to customers. Many of us are familiar with this product, widely linked to the online borrowing market; the payday loan.

Many lenders for many years offered payday loans, such as the lender Lending Stream. A payday loan allowed the applicant to borrow an agreed amount until their next employment pay date when the agreed amount would be repaid. Payday loans varied in value but were often in the region of £300.00 and given that interest was usually charged at about £30.00 per every £100.00 which was lent, a loan of this value would have meant a repayment of £390.00 on the agreed due date. Although the payday loan product was simple and easy to understand, many lenders such as Lending Stream, found that customer struggled to make the lump sum repayments requested of them. In such instances customers turned to expensive extension fee repayments which allowed the interest of the loan to be paid to avoid a default whilst not reducing the amount originally owed.

What became clear over the years was that the payday loan product was no longer able to effectively meet the modern day requirements of the short term loan user. As a result of this some big changes were made within this market. Not only has the product offered nowadays changed but also the way in which lenders approach the process of approving these short term loans. Taking Lending Stream as an example, they now offer customers the opportunity to apply for short term loans which can be repaid over 6 monthly instalments. The idea being here that the term is fixed and therefore avoids the need for the expensive extension payments and also the monthly repayment amount is considered more manageable. Given that the term of repayment has been extended in this instance, the repayment amount each month is considerably less than the lump sum style of the payday loan. The other change which has taken place is within the application approval process as mentioned. Nowadays lenders take into account far more than just simple snapshot of the applicants credit reference file. This means other elements are used to determine if the requested loan is suitable to the individual in question. Whether this be related to affordability and budgets or employment status and related details, the point being the checks nowadays are more specific to the individual applicant.