Modern Offerings of Short Term Loans

Within the online market for short term loans there are now a number of different options which are available to consumers. Whereas in the past this market place was mainly reversed to a specific type of borrowing, nowadays consumers have a better selection when it comes to borrowing a small sum of money. Take for example the payday loan market. Payday loans have been offered online for many years now and as such the product has evolved over time and as the needs of consumers have changed. Payday loans were the original form of short term loans and have been used by millions of consumers. In many respects the payday loan has in recent times been replaced in terms of the specific product which was once so popular. Nowadays consumers considering short term loans often prefer the product offered by payday loan lenders. Hailed recently as the newest version of the payday loan, instalment loans are an extension of this simple online loan and adds to add flexibility and chose back into the online market place. Today we will explore how this market has changed in greater detail and what this means for a modern day consumer looking to borrow a small sum of money over a short period of time.

Short term loans used to be presented in a very simple form and this product was known as the payday loan. The payday loan allowed the short term loans market to grow and in doing so become a more regular feature in terms of consumer borrowing habits. The payday needed to simple because it was one of the very first ways in which consumers could borrow money via the means of an online based application process. In order to deliver a simple and therefore clear to understand product, payday loans meant one specific way of borrowing; until your next pay day. Due to this fact these loans allowed consumers the ability to borrow for a period up to 31 days at most. The interest which was applicable usually meant consumers repaid £30.00 for each £100.00 being borrowed and as such a £300.00 loan of this nature was likely to mean a repayment of £390.00 on the agreed repayment date.

Although the principle of this type of borrowing was correct, the reality was that consumers needed to have more flexible repayment terms for short term loans and not have to face what was in reality, a sizable one off repayment to clear the small loan. This is why in more recent times the short term loan has changed to allow better choice for consumers. The new version of these loans as mentioned above is the instalment loan. The instalment loan gives consumers the choice of repayment term and is not restricted to a 31 day period like was the case in the past. As a result consumers can select to repay the loan over a number of monthly if more suitable to do so with interest being calculated to reflect the specific period of repayment.