Short Term loans – or Payday loans – are designed to plug a funding gap in an emergency.
But are they used correctly? Used properly, the Payday loan concept is a valuable service; it provides funding to those who do not have access to small loans from their Bank or other financial institution.
Sadly, there was a time preceding Financial Conduct Authority regulation where some payday companies did not act in the best interests of their Customers and, instead of providing a useful service and protecting and nurturing their Customer’s, chose instead to fleece as much income as they could from anyone wanting a loan for any purpose and who did not demonstrate that they could afford such a loan.
The Market is different now. With successful regulation has come greater confidence that short term / payday loans are safer for consumers.
What is successful regulation? Well, it is simple really, it involves ensuring the fairest outcome to the Consumer; that they are treated fairly, not charged extortionate interest and, fundamentally, unable to receive a loan if they cannot afford to repay it. To this end, Lenders such as TheQuickLoanShopLtd ensure all applicants are thoroughly means tested to ensure that they are able to afford the loan they want.
So it is safer. Should you apply for a payday loan though?
The answer to this is can you get funding more affordably? If not, then a payday loan may be the answer. Why do you want one? Is it to buy something not vital; something that you do not need? If the answer to this question is yes, then you should rather save up until you can afford it rather than seek instant finance. If you have a broken down car you rely upon or other such emergency, then this is where a Short Term Loan comes into its own – using it for this reason is appropriate providing you are sure that you can afford the repayments.
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