For many years short term loans online were offered in a very specific format. The format in question was one of payday loan nature. Many of us will already be familiar with the payday loan and how it works but nevertheless let’s refresh our knowledge. The payday loan was the original type of short term loans online. Designed to give consumers the ability to borrow on a small scale, these loans were simple in nature and in repayment options. As the name clearly suggests a payday loan saw a customer borrow an agreed amount until the date of their next employment pay date. On the arrival of this date the customer would agree to repay the loan amount borrowed as well as the interest charged by the lender for borrowing. This repayment would be made as a one-off payment and upon receipt the loan was deemed as closed. The payday loan still exists as one of the popular short term loans online today. In order to ensure the entire product and service was reflective of one-another, the payday loan gave customers only the ability to borrow small sums, given the short periods of repayment available. Some customers would borrow for as little as a week with others borrowing for no-more than a month. As such, the loans available were normally for between £50.00 and £300.00 and therefore saw customers made repayments up to £400.00 as a single repayment to repay the loan.
Whilst short term loans online existed in the payday loan format for many years which followed their initial introduction, over time it become evidently clear that customers of the product needed a greater selection of choice when it came to their short term borrowing needs. This is why in recent years instalment loans have been added to the products offered within the short term loans online marketplace. Instalment loans have effectively taken the best qualities of the payday loan and then added the addition of more flexible repayment choices. Where the payday loan was excellent at offering a discreet and timely access to short term borrowing, the limitations of the repayment options meant that often customers were not able to find a product wholly suitable. The introduction of instalment based borrowing means that nowadays consumers have the ability to select a term of repayment which does not demand a lump sum payment amount. Instead many short term loans online lenders give their customers choice when it comes to the repayment amount due, depending on the term of repayment chosen. Depending on the loan amount, whether that be £100.00 or £500.00, there will likely be several different repayment options which are available. This could mean 2 monthly instalments or as many as 12 monthly instalments in instances of larger loan amounts. This shift to better repayment choices has meant that increasingly short term loans online are becoming sensible and desired lending choices amongst consumers once again. This is great news for the borrowing market as a whole.