People struggling to pay bills before payday often turn to short term lenders to meet their financial responsibilities. Doing so allows these individuals to pay their bills on time so that they do not default on payments before their wages or salaries are actually received.
Short term loans can bridge the gap for meeting financial obligations, while waiting for monies to be received. When attained, these funds may then be used to pay back the short term loan. Defaults on repayments for credit commitments may, otherwise, affect an individual’s credit worthiness. Lenders make use of credit history to determine loan approval and loan repayment terms.
Payday loans have become increasingly popular and for this reason, lenders do require potential borrowers to complete affordability assessments to determine their ability to meet future repayments. Short term lending is a solution for those in need of money within a short time scale. Payday loans provide timely access to smaller funding amounts with shorter repayment periods.
Payday loan companies follow voluntary guidelines and codes of practice set by government for credit, such as a short term loan. These guidelines ensure borrowers receive suitable loan terms. Although payday loans are short term loans, where needed, individuals may be able to repay their loans by affordable repayment amounts over adjusted time scales.
The short term loan industry strives to meet responsible lending practices so that the needs of diverse customers may be met. A guarantor loan and short term instalment loan are possible alternatives to a payday loan.