The National Institute for Budget Information, better known as LOAned, has conducted research into households that have applied for a payday loan through an intermediary in the last two years. The investigation has shown that there is satisfaction about taking out a payday loan. There are hardly any complications in paying off the monthly amount on this type of loan. From this it can be concluded that more and more consumers are taking out a loan that matches their personal situation but especially their financial situation. One of the reasons for this development is the more flexible acceptance standard that is nowadays often used when taking out a loan. Banks use various assessment criteria that are used to calculate whether the monthly charges are appropriate.
WHAT DOES A PAYDAY LOAN CONTAIN?
But what exactly is a payday loan? A payday loan offers the possibility to request a certain amount of money in one go. That amount is approximately between 5,000 and 50,000 euros. You must therefore repay this entire amount within the agreed term. The interest of this amount is also fixed, while with a revolving credit the interest rate fluctuates. The advantage of a fixed interest rate is that at the start of your loan you already know exactly how much you will have to pay off each month. This way you prevent unexpected surprises.
INFLUENCE OF DURATION AND INTEREST
The investigation has shown that the associated duration has more effect on consumer experiences than was established before. In general, the rule applies: The longer the duration, the lower the customer satisfaction. From this it can be concluded that consumers who have taken out a payday loan have difficulty paying off the loan amount after the money has been spent. Negative feelings about the loan can arise when the necessity of the loan has disappeared.
The LOAned draws the attention of lenders and intermediaries to more attention to the duration and the total amount of a payday loan to establish than is currently the case. With this process, there is a great responsibility with the design of the choice environment on the website. The research shows that when the total amount of a payday loan is clearly shown, more consumers opt for a shorter duration than if this is not the case.
COMPARING A PAYDAY LOAN
By comparing multiple loans when taking out a payday loan, you gain more insight into the term and the total loan amount and which payday loan is most suitable. There are innovation comparison websites that optimize this process. Comparing a loan gives you a better overview of which lender has a favorable term and low interest costs. When you have found a suitable loan you can take out a loan directly with this comparator. It is also possible to take out a loan from these comparators. Transferring a loan means that you take out one new loan for an amount with which you can repay all existing loans.