A recent report in The Guardian is suggesting that, for the first time, people could be seeing short term loans as a very real alternative to credit card lending. Not only are the UK public recognising the ease and convenience of obtaining short term loans of this nature online but, according to The Guardian’s source, PricewaterhouseCoopers, there is also a very real chance that short term loans will overtake credit card borrowing over the coming months.
PwC indicated that consumers turned away from high street banks and credit card companies due to their bad credit rating have been more or less forced to explore the option of the instant cash loan as a last resort when they’ve needed an emergency cash injection. However, this has inadvertently helped both the borrower and the lender raise their profile: the borrower improving their credit rating providing they pay back as and when agreed and the online lender through raising their brand recognition.
As PwC commented, the instant cash loan market has always been associated with individuals and families at the lower end of the earnings bracket, but the appeal of the convenient, no credit check loan companies, with their ease of access online and ability to transfer funds at a swift rate of knots, is now spreading far beyond the low-income sector
It is this convenience coupled with the innovation shown by the instant cash loan market leaders that is attracting customers from a much more prosperous consumer base, not only from individuals but from small businesses, too.
As firms become more wary of their cashflow, investments in stock, even for one-off orders, have to be considered. If there is a instant cash loan available that, knowing the total cost of finance in advance as is now a lawful attribute for online lenders, they can build this directly into their costs and perhaps take orders they may otherwise have shied away from.
Payday loan firms have been in the news for all of the wrong reasons, lately, mainly due to no fault of their own, rather the plight of those who have borrowed irresponsibly have had their self-imposed circumstances used as a stick to beat the industry with. This, however, has had the positive effect of tightening up online loan regulations directly leading to this interest from a sector of the UK one may never have assumed drawing upon this type of facility. Every cloud, eh?
More on The Guardian/PwC report tomorrow.