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Direct lenders – what they offer

THERE ARE DIFFERENT TYPES OF LOAN LENDERS OPERATING WITHIN THE SHORT TERM LOANS MARKET.

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Direct lenders – what they offer

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  1. Direct Lenders – What They Offer

  2. THERE ARE DIFFERENT TYPES OF LOAN LENDERS OPERATING WITHIN THE SHORT TERM LOANS MARKET. THEY VARY IN THE TYPE OF PRODUCT THEY OFFER AND ALSO THE ACTUAL SERVICE THEY PROVIDE. IT IS IMPORTANT TO UNDERSTAND HOW DIRECT LENDERS CAN PROVIDE A VERY DIFFERENT SERVICE TO OTHER LENDERS OF A SEEMINGLY SIMILAR NATURE.

  3.  THE CONCEPT OF BORROWING FROM A SHORT TERM LENDER IS NO LONGER AN UNCOMMON OCCURRENCE WITH MANY CONSUMERS REGULARLY USING THIS MARKET TO SATISFY A MONTHLY REQUIREMENT TO BOOST INCOME. SEVERAL YEARS AGO THE IDEA OF USING SUCH A LOAN WAS UNHEARD OF UNLESS THE SITUATION WAS CONSIDERED EXTREME AND THE CONSUMER HAD ‘NO OTHER CHOICE’.

  4. THANKFULLY AS TIME HAS PASSED AND THIS TYPE OF LENDING HAS BECOME MORE PUBLICLY ACKNOWLEDGED, THE UNDERSTANDING OF WHAT IS ON OFFER IS GROWING BUT AS I’VE SAID THERE IS STILL A WAY TO GO BEFORE THE CONSUMER TRUST IS FULLY SECURED.

  5. SADLY THE MORE POPULAR PRACTICES OF SOME OF THE OLDER AND DATED  LENDERS MEANT EVEN THE DIRECT LENDERS WERE BRANDED AS EXPENSIVE AND NOT CONSUMER FRIENDLY IN THE PAST AND FOR THE MOST PART THIS WAS VERY MUCH JUSTIFIED. 

  6.  IN THE PAST THE PRACTICES OF THESE LENDERS WAS SHOWN TO BE AGGRESSIVE AND NOT IN KEEPING WITH THE UNIVERSAL UNDERSTANDING THAT A CUSTOMER SHOULD BE, AT THE VERY LEAST, TREATED FAIRLY.

  7. THESE LENDERS DEMONSTRATED PRACTICES WHICH WERE LESS THEN FAVOURABLE WITH IT’S CUSTOMERS AND ULTIMATELY HELPED TO FORGE BETTER REGULATIONS AND GUIDELINES WHICH NOW FORM THE BASIS OF THE MARKET NOW IN EXISTENCE. IN THE PAST THE ONE MONTH LOANS ON OFFER WERE EXPENSIVE AND TOUGH, LET’S EXPLORE WHY.

  8. WHEN THE MARKET FIRST EXPLODED INTO LIFE ABOUT 8 YEARS AGO THE LENDERS OF THE TIME WERE IN CONTROL AND THANKS TO PROVIDING A MEANS TO AN END (WHICH WAS THE CASE FOR MOST CONSUMERS USING THEM) WERE ABLE TO SET THE STANDARDS OF THE PRODUCT AS THEY WISHED. THIS MEANT THINGS LIKE THE COST WERE IN THE COMPLETE CONTROL OF THE LENDER. AN EXAMPLE OF THIS IS HOW THE INTEREST WAS AND IS TYPICALLY BILLED TO A ONE MONTH LOAN.

  9. IN MOST CASES THE LENDER WOULD CHARGE A STANDARD AMOUNT OF INTEREST FOR THE AMOUNT BORROWED; WITHOUT TAKING INTO ACCOUNT THE PERIOD OF TIME THE FUNDS WILL ACTUALLY BE BORROWED FOR. GIVEN THAT SUCH LOANS, AS THE NAME SUGGESTS, REQUIRES REPAYMENT TO BE MADE ON THE FORTHCOMING PAY DATE, THIS MEANT A CUSTOMER WITH THE LOANS 15 DAYS WOULD PAY EXACTLY THE SAME AS A CUSTOMER WHO HAS THE LOAN FOR 30 DAYS.

  10. THERE WERE OTHER SOMEWHAT UNFAIR COSTS ASSOCIATED TO THESE LOANS, NAMELY FEES, OFTEN THERE WAS A FEE FOR APPROVING OR DEPOSITING THE LOAN, SUCH AS A £10.00 FEE IF A CONSUMER WANTED THE FUNDS THE SAME DAY. OFTEN LENDERS WOULD OFFER AND IN SOME EXTREME CASES AUTOMATICALLY EXTEND A CONSUMERS ACCOUNT AS WELL.

  11. AN EXTENSION MEANT ONLY THE INTEREST APPLICABLE WAS PAID AND THEN THE FULL BALANCE, INCLUDING ANOTHER MONTH’S INTEREST, WAS THEN DUE ON THE SUBSEQUENT REPAYMENT DATE. THIS WOULD MEAN CONSUMERS COULD FOR MONTHS ON END MAKE REPAYMENT AND NEVER ACTUALLY REDUCE THE AMOUNT THEY OWE.

  12. ALL IN ALL THE LOAN PRODUCT CLEARLY BECAME DATED AND NEEDED SOME INTERVENTION FROM GOVERNING BODIES TO ENSURE WHERE THE PRODUCT WAS STILL BEING OFFERED, IT WAS FAIR AND CONSUMER FRIENDLY. THESE ARE JUST SOME EXAMPLES OF HOW THE PRODUCT ITSELF CAN OPERATE BUT AS I SAID IT IS ALSO MASSIVELY IMPORTANT TO UNDERSTAND OF THE REMAINING LENDERS, WHO SHOULD BE USED BY CONSUMERS.

  13. THE FUNDAMENTAL DIFFERENCE BETWEEN A DIRECT LENDER AND BROKERS ARE THAT DIRECT LENDERS ARE RESPONSIBLE. THE OTHER LENDERS AVAILABLE TEND TO BE LOAN BROKER. A BROKER WILL ASSESS THE INFORMATION SUPPLIED IN THE APPLICATION AND THEN SUGGEST OTHER SUITABLE LENDERS; WHO HAVE ALREADY PREVIEWED YOUR INFORMATION IN MOST CASES. THE BROKERS ARE IN EFFECT THE ONES TO AVOID. THEY WILL TYPICALLY CHARGE A FEE FOR THEIR SERVICE AND THIS ‘SERVICE’ DOES NOT EVEN GUARANTEE A LOAN WILL BE GRANTED. 

  14. THE FEE CAN BE UP TO £80.00 AND THIS IS CHARGED AT THE POINT OF THEM SUBMITTING THE SEARCH TO FIND THE CONSUMER A SUITABLE LOAN, A COSTLY OPTION FOR SOMEONE WHO IS IN NEED OF A SHORT TERM LOAN IN THE FIRST PLACE. ULTIMATELY I THINK IT IS IMPORTANT CONSUMERS ARE AWARE OF THE FACTS AND ARE ABLE TO MAKE AN INFORMED DECISION REGARDING THEIR BORROWING NEEDS, STICKING TO THE DIRECT LENDERS WILL HELP IN THIS PROCESS.

  15. For More Information: www.pacific-odyssey.co.uk

  16. Thank You

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