Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk
High Street banks in the UK are associated with lots of red tape, high fees, and commissions, lengthy application processes, and lower rates of approval. Banks are so mired in bureaucracy, it’s no wonder that anything gets done with any degree of urgency.
The rules and regulations that banks are subject to are designed to protect banks from collapsing, and dragging the UK economy down with them. However, these well-intentioned regulations are not without their problems.
Anyone applying for a line of credit such as a short-term loan, will find it increasingly difficult to get approved by a High Street bank such as Lloyds PLC, HSBC, RBS, or any of the other 100+ British banks.
The short and sweet of it is that the UK authorities have put measures in place requiring banks to be stricter about the issuance of credit facilities. This does not bode well for everyday folks looking for loans.
Fortunately, this disequilibrium has given rise to the instant payday loans industry. Since the 2008 global crisis, many online lenders have surfaced. They have dramatically cut back on regulatory constraints that banks impose on customers.
Over the years, people have been avoiding big banks in favour of online loans for things like debt consolidation, automobile loans, home renovations etc. People are tired of being rejected by banks.
Thanks to the Internet, many FCA licensed FinTech companies have come into being. These online loans companies make it easy for customers to apply for loans, and get approved. Plus, it’s a breeze to compare rates between online lenders with a loan calculator.
Assorted options are available, including peer-to-peer lines of credit, instant payday loans, and the like. To date, billions of pounds has been lent via online loans. Banks are now scratching their heads, wondering how they missed out on this lucrative and underserviced market.
In fact, the situation is so dire that banks are now employing consultants from online loans companies and FinTech enterprises to set up mobile friendly loan application services to attract clients.
Conventional thinking says that people trust brick and mortar banks over online lenders any day. But that has changed with the Internet of things. Mega-tech companies like Google, Facebook, Amazon and other e-commerce giants make it possible for people to trust FinTech.
For starters, it is much easier to access the services of online loans providers than banks. Customers regularly credit online lenders with higher approval rates, especially if they have the right credit score. Many online lenders will assess a customer on an individual basis, so there is definitely plenty of flexibility involved.
Besides for the convenience of being able to apply for a loan online – and not have to visit a land-based bank – many online lenders offer competitive interest rates. Banks have higher fixed costs to take care of, and this is often built into the cost of the loan. Online lenders don’t have to contend with those fixed costs.
However, online lenders offer unsecured loans (no collateral is needed) so you may be expected to pay higher interest rates for the privilege of instant payday loans. Today, it is possible to find online personal loans for people with poor credit, average credit, or excellent credit.
You may be asked to pay a little more for bad credit loans, but if you are gainfully employed, it shouldn’t be a problem getting approved for an instant payday loan.
For these reasons, and many more technical reasons, online loans are gaining in popularity across the UK. Now that a Brexit is underway, many people are concerned that banks will stop lending to them, or at least tighten requirements. When you’re in a bind, online lenders are quick to respond, and they will work with you to meet your credit needs.
EXPLORE FERNOVO’S SHORT TERM LOAN RATES HERE.
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