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Short Term Loans – The Checks to Expect

IN THE PAST OBTAINING A SHORT TERM LOAN COULD BE DONE SO QUICKLY AND EASILY AND ALTHOUGH THESE TWO FEATURES REMAIN IN PLACE TODAY, THE OVERALL APPLICATION PROCESS HAS CHANGED QUITE DRAMATICALLY. Visit this link:www.pacific-odyssey.co.uk

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Short Term Loans – The Checks to Expect

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  1. Short Term Loans – The Checks to Expect

  2. IN THE PAST OBTAINING A SHORT TERM LOAN COULD BE DONE SO QUICKLY AND EASILY AND ALTHOUGH THESE TWO FEATURES REMAIN IN PLACE TODAY, THE OVERALL APPLICATION PROCESS HAS CHANGED QUITE DRAMATICALLY. WHEN SHORT TERM LOANS FIRST BECAME POPULAR THEY WERE WELCOMED BECAUSE OF THESE KEY FACTORS. THEY EFFECTIVELY PROVIDED CONSUMERS WITH ALMOST INSTANT ACCESS TO ADDITIONAL FUNDS IN A WAY THAT HAD NOT BEEN SEEN BEFORE. 

  3. IN YEARS GONE BY A CONSUMER LOOKING FOR A LITTLE EXTRA CASH WOULD HAVE HAD TO TURN TO THEIR BANK OR CREDIT CARD AND EITHER OF THESE COULD MEAN A DELAYED APPLICATION PROCESS; PARTICULARLY FOR A NEW CREDIT CARD. SHORT TERM LOANS HOWEVER WERE DIFFERENT. A CONSUMER COULD APPLY FOR THE LOAN ONLINE AND IN MOST CASES RECEIVE THE FUNDS THE VERY SAME DAY. THIS SIMPLE AND VERY PRIVATE PROCESS MEANT THAT ALMOST OVERNIGHT THE WAY IN WHICH CONSUMERS BORROWED CHANGED.

  4. SUCH LOANS MEANT A CONSUMER NO LONGER NEEDED TOEXPLAIN THE REASON FOR THE LOAN AND COULD INSTEAD MAKE THE BORROWING DECISION FOR HIMSELF. FOR THOSE WHO HAD AN IMMEDIATE FINANCIAL SHORTFALL THIS PROVED EXTREMELY USEFUL. THE FUNDAMENTAL ISSUE WITH THIS TYPE OF BORROWING WAS NOT JUST THE EASE OF ACQUIREMENT BUT ACTUALLY, THE PRODUCT BEING OFFERED. IN THE PAST A CONSUMER LOOING TO BORROW ANYTHING FROM £100.00 TO TYPICALLY £500.00 COULD DO SO AND FIND THE FUNDS IN THEIR ACCOUNT THAT DAY. 

  5. THE AGREEMENT WAS STRAIGHT FORWARD AND ASKED THAT THE AMOUNT BORROWED BE REPAID ON THE CUSTOMER NEXT PAY DATE, WITH THE INTEREST APPLICABLE. MOST LENDERS CHARGED THEIR INTEREST PER AMOUNT BORROWED, RATHER THAN TIME BORROWED. THIS MEANT ANYONE BORROWING £400.00 WOULD PAY IN THE REGION OF £520.00 ON THEIR PAY DATE. THIS MEANT WHETHER THE AMOUNT WAS BORROWED A MONTH BEFORE PAY DAY OR A WEEK THE AMOUNT WAS EXACTLY THE SAME.

  6. QUITE OBVIOUSLY THESE AMOUNT WERE EXPENSIVE BUT ALSO THE CONCEPT OF A LUMP SUM REPAYMENT PROVED UNREALISTIC FOR MANY WHO INSTEAD TURNED TO THE OFFERING OF AN EXTENSION. AS THE NAME SUGGESTS A CUSTOMER COULD CHOOSE TO EXTEND THEIR LOAN BUT THIS WAS NOT A FREE SERVICE. TO EXTEND THE LOAN THE LENDER ASKED THAT THE INTEREST APPLIED BE REPAID INSTEAD, IN OUR EXAMPLE ABOVE THAT’S £120.00. ALTHOUGH AT FACE VALUE THIS SEEMS LIKE A SUITABLE OPTION,

  7. THE REAL ISSUE WAS THE FOLLOWING MONTH WHEN REPAYMENT IN FULL WAS THEN DUE AND THE FULL £420.00 WAS APPLICABLE. EFFECTIVELY CONSUMERS WERE NOT REDUCING THE AMOUNT THEY OWE, SIMPLY DELAYING IT. FOR MANY THIS WAS A CYCLE OF DEBT. THIS IN TURN LEAD TO CONSUMERS BORROWING FROM MULTIPLE LENDERS AND ENDING UP WITH LOAN REPAYMENTS HIGHER THAN MOST OF THEIR SALARY.

  8. HOW DID THIS HAPPEN? IN SIMPLE TERMS THE CHECKS BEING COMPLETED BY LENDERS WAS SIMPLY NOT ENOUGH TO GENUINELY UNDERSTAND IF THE CUSTOMER HAD THE MEANS TO MAKE THE CONTRACTUAL REPAYMENTS. THIS MEANT EVENTUALLY A LENDER COULD AND WOULD HAVE BEEN LENDING TO SOMEONE WHO ALREADY HAD A NUMBER OF SHORT TERM LOANS.

  9. AS THIS FACT BECAME INCREASINGLY CLEAR THE MARKET AS A WHOLE STARTED TO TRANSFORM AND NOT ONLY NOW HAS THE PRODUCT BEING OFFERED CHANGED DRAMATICALLY BUT SO HAS THE EFFORTS THE LENDER IS MAKING TO LEND RESPONSIBLY. TYPICALLY NOW A CONSUMER LOOKING FOR A SHORT TERM LOAN IS LIKELY TO BE OFFERED.

  10. A FAR MORE FLEXIBLE INSTALMENT LOAN PRODUCT WHICH OFFERS A RANGE OF MONTHLY INSTALMENTS INSTEAD OF AN UNREALISTIC LUMP SUM REPAYMENT. THIS IMMEDIATELY ASKS THE CONSUMER TO TAKE SOME RESPONSIBILITY IN BORROWING WISELY AND SELECTING A TERM THAT IS REALISTIC. THE LENDER ALSO NOW PLACES SPECIFIC FOCUS ON THE APPLICANT’S AFFORDABILITY.

  11. THIS IN SIMPLE TERMS MEANS THE LENDER ASKS THE APPLICANT TO PROVE ACTUAL DETAILS RELATING TO THEIR MONTHLY EXPENDITURE. MANY SHORT TERM LOAN APPLICATION FORMS NOW ASKS THE BORROWER TO PROVIDE THE AMOUNT THEY RECEIVE INTO THE HOUSEHOLD MONTHLY AS WELL AS A BREAKDOWN OF THE MONTHLY COSTS. THIS WILL TYPICALLY INCLUDE MONEY ALLOCATED FOR RENT, LIVING EXPENSES, OTHER CREDIT COMMITMENTS AS WELL AS OTHER MONTHLY GOINGS THAT MAY NEED ACCOUNTING FOR. 

  12. THE LENDER CAN THEN USE THIS INFORMATION ALONGSIDE THE CREDIT REFERENCE FILE AND ALL THE OTHER INFORMATION SUPPLIED IN THE APPLICATION TO ENSURE THE APPLICANT HAS THE TRUE ABILITY TO REPAY THE LOAN. THIS APPROACH ALSO ENSURES THE LENDER CAN QUICKLY SEE IF THE CUSTOMER IS REALISTICALLY OVER COMMITTED FINANCIALLY AND MAKE THE CORRECT CHOICE NOT TO AGREE THE LOAN.

  13. AGAIN THIS SHOWS ANOTHER MASSIVE STEP FORWARD ON THE PART OF THE LENDER BY ASKING THE APPLICANT TO PROVIDE INFORMATION ACCURATELY TO ASSIST THEM IN LENDING RESPONSIBLY. PROVIDING THE LENDER AND BORROWER CONTINUE TO IMPROVE THEIR PRACTICES WHEN IT COMES TO LENDING, THE MARKET AS A WHOLE WILL BE A MUCH MORE RELIABLE PLACE.

  14. For more information go homepage: www.pacific-odyssey.co.uk

  15. Thank You

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