Payday lenders

Online Payday Lenders vs High Street Payday Lenders

Posted on 7th October 2016

When it comes to payday lenders, there are two choices customers can have: online payday lenders and high street consumer lenders. What makes each of these lenders so different? Today you are going to learn the ones that are perfect for you and you can make a decision on which lender you should choose.

What is an online payday lender?

An online payday loan lender is a company that issues short-term loans for consumers directly to their account. Many responsible lenders in this category are trying to encourage borrowers to take money out properly and with a plan and a budget. A study from the Consumer Finance Association found that 93% of payday loan borrowers are satisfied with the experience. This is especially true online as more of the market moves online. More people want to find loans wherever they are, as opposed to going to a local high street payday loan store to borrow cash.

An online payday lender will offer affordable loans from £50 to up to £1,000 depending on the lender. The most important that you can do when you are borrowing money from an online lender is be honest about what you need to borrow versus against what you want. It’s human nature to borrow more money than we need just so you can feel like you have the money whenever you need it. Due to the fact that the lender is online, it might make you feel like the money is not ‘real’ and you can just borrow what you want.

In fact, online lenders make people more accountable because you can access your loan at any time online. Responsible online lenders are excellent for people to use because they can be reached at any time through the phone, email or their head office. Good online lenders will have a customer service helpdesk that you can also use, as well as social media.

What is a high street payday lender?

Known for their super bright signage and the fact they are open frequently, high street payday lenders have become more popular as consumers look for options that are quick and easy. With a high street payday lender, you get to talk to a person in real life straight away and you can know the answer to your questions about the loan that you want to take out.

High street payday lenders will have you fill out forms and they will process your application. Other high street payday lenders will allow cheque cashing as well.

What makes online payday lenders stand out?

Online payday loans stand out from the crowd because of their efficiency. The market has grown so much that you can know receive your money straight away, sometimes within hours and most of them time during the same day. This is because lenders are responding to customers who want to be able to access their money straight away.

Online payday loans have the APR and terms and conditions clearly written on them. The growth of repayment calculators has totally changed how people approach borrowing online. Now, it is clear how much you need to repay. 90% of payday loan customers are satisfied with the terms and conditions of their loans, according to the Consumer Finance Association. In light of this, it is important to choose online payday lenders who are direct lenders so that you get the best terms and conditions in the market.

Payday loans grew from the need to get credit but not massive amounts. Many people can get overwhelmed with massive loans such as personal loans that exceed £2,000, for example. Online lenders solve this problem by offering smaller, more manageable amounts for loans that can be repaid without problems.

What makes high street lenders stand out?

The idea of being able to talk face to face with someone about a loan you need is something that has made these loans extremely popular with customers. Human beings like human interaction; it is not surprising to see the growth of high street lending as more consumers want to talk over the short term loans that they want to borrow.

The problem is if a customer falls into a financial trap or goes through financial problems, it can be embarrassing to talk about these problems face to face in a high street payday lending shop.

Which option is the one consumer should opt for?

Ultimately, each customer needs to choose the one that is right for them. However, online payday lenders win in the battle because of the sheer efficiency that the technology has created for borrowing money. Borrowing money before the rise of payday loans used to make some customers feel embarrassed about asking to borrow money especially if they are going through financial difficulty. Online payday lending can be done from the comfort of the borrower’s home and it also preserves dignity especially if someone is shy and does not feel comfortable walking into a shop to discuss their finances.

Online payday lenders suit the future of finance as being one that is based on giving customers what they want, whenever they want, as opposed to walking into a high street payday loan store where there are time constraints.

You know online borrowing is right for you if…

  • You spend the majority of your time online whether it is through your phone or a laptop
  • You keep track of your expenses on your phone
  • You don’t visit the high street often
  • You use email frequently
  • You use online banking every day to monitor your payments

Whichever option you choose, the basic rules remain the same – only borrow what you can afford to pay back and only borrow money when you have a monthly income that will allow you to pay back the amount once you receive your wages at the end of the month. With a solid attitude like this, you will be able to borrow from online payday lenders or high street lenders without problems.

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