Over the years the way in which consumers have used payday loans has changed. In more recent years the borrowing behaviours of consumers have shifted to favour the more flexible and instalment based payday loans. This shift has taken many years and it is only within this recent time frame that lenders have begun to move away from more classic forms of payday borrowing and instead expanded their product offering to include that of instalment based payday loans. The payday loans market is not alone in its change in terms of how customer behave and expect to be able to repay and in reality, many consumer market places have shifted over the last 5 years.
Nowadays it appears common-place that consumers will turn to a variety of credit based facilities in times when the required funds are not readily available. Although credit has always been available, traditionally speaking consumers only used credit when a considerable financial resource was needed. This could have been a home improvement for example or the purchase of a new car. Effectively credit was used when larger scale purchases needed to be made and then repayments managed effectively over an agreed period of repayment. As time has passed the use of credit has become more common place as the general availability of it has steadily increased. In the last decade we have seen a whole host of new credit resources not least payday loans. Along with payday loans there are now store cards, catalogue based credit agreements as well as credit cards available for varying sums. What this means is that consumers have become better able to manage their finances via the means of credit and the monthly commitments they demand.
Like so many forms of credit, payday loans are only really ever useful to consumers when they are used in the correct and intended manner. Payday loans were never designed to offer continuous and on-going financial support to consumers and instead remain to serve consumers who experience a short term financial need. In simple terms this means payday loans are best suited to times when an unexpected or unplanned cost presents itself. Equally this cost should not be large in nature and instead unlikely to occur month in and month out. This means where a payday loan may be suitable for a car repair or broken home appliance, it would not be suitable for a new car purchase.
Using the ‘correct’ financial resource for the financial need is very important in determining whether that resource is realistic and affordable. When consumers agree to credit without the required consideration as to whether the resource and its repayments are truly affordable, this can of course lead to financial difficulties down the line. Payday loans like so many other credit based facilities, are offered in a range of different terms and loan amounts and therefore there is flexibility and choice to help assist in making sensible and considered borrowing choices within this online based market place.