For some reasons which I won’t get into here and now, when people simply don’t understand the true value of something the very first thing they do is criticise it instead of trying to learn a bit more about it so that they could perhaps understand where the value comes from. That said, not everything is for everyone and in the case of the manner in which you get your required credit via a loan you take out, not all available options are for everyone either.
Let’s just say you’ve spotted a mega business opportunity for example which would require you to raise capital very quickly so that you can capitalise on it. Well, good luck getting that loan in time from your bank, if they’re going to give it to you at all that is, despite the fact that you probably have a decent credit record and the emergent business venture you want to pursue is as solid as business ventures come!
This brings me to a discussion of the payday lending industry, which in this case would work well to plug the gaping holes in the credit issuing models banks use – a rather archaic model to say the least…
The payday lending industry has definitely evolved to the point that traditional banks are rethinking their own archaic lending strategies, although pretty much none of them would come to admit this behind-the-scenes assignment they have going on.
One of the most notable changes to the payday lending industry is that of the typical and average amount borrowed by UK residents from the likes of Mrlender.com. This is a very important observation because it demonstrates the all-important fact that borrowers now have a deeper, much more insightful understanding of exactly what payday loans are meant for – a short term solution to some financial needs which simply cannot be deferred.
By no means does this have to be interpreted in a negative light – I mean if you’re assessed to be able to take out a payday loan and you’re approved for the amount you want to borrow, naturally it would be an amount you’re planning to pay back within the designated short-term period forming part of the repayment terms. If, however, you fail to pay back, lenders can deploy various debt collection methods that can allow you to start paying the loan in a way that is feasible to them and to you. In some cases, borrowers try to outsmart the lenders by disappearing after borrowing money. This practice is unethical and lenders can then use the services of Bond Rees or similar companies to track the individual down, and claim their money back. Although, this can be considered a last resort and would not be necessary if both parties stick to their terms.
Going back to the example of wanting to capitalise on an emergent business opportunity, this can be something as simple as seeking to stock up on some supplies which you intend to use to generate more money, to tide you over until the end of the month / week, etc, or simply to prepare for something like the month-end rush (if you’re some sort of vendor).
The payday lending and borrowing industry has been blown wide open in its demystification, which is a good thing since it now means more and more people can learn how best to approach getting credit in this way and capitalise on the uniquely available advantages of payday loans in the manner originally intended by the creation of the payday lending structure.
Katie is a finance specialist with one of the biggest firms in London. From savings to investments, there’s nothing she can’t advise on and she’s here to help spread the word and help you on your way to financial freedom.