2014 Lender Lists:

What Key Feature Should You Look for in a Loan?

A recent post highlighted the 10 Features that the best lenders offer through their online products. Out of these discussed product features, the two that stand out for me personally would be competitive pricing and highly flexible terms, but which one of these edges it? Here at Miyagi Loans (and at various other review sites) you will tend to find that pricing is primarily used to compare lenders against each other. If you use car insurance comparison websites such as Go Compare, then you will see a similar pattern. People naturally tend to go with the top cheapest priced listings there, at times ignoring the excess levels and policy features.

Pricing is certainly very important to study and if you aren’t careful then you could up end up paying much more with some companies. Most lenders over shorter terms tend to charge 1% daily or around that for interest. The problem usually occurs when expensive admin or transfer fees are added on top of the bill. An example of this would be with MiniCredit where a forced transfer fee of £19.50 must be paid aside of the interest. When comparing products here, we always show full same day charges. Highly flexible terms was mentioned above. Flexibility does in fact connect and make a big difference when factoring pricing.

A typical monthly payday lender may charge you £30 per £100 over the month, but a flexible short term lender may just want £20 per £100 over 20 days. If you are being paid in around 20 days time then this obviously makes the flexible company the ideal choice whereby you are paying rates based on the duration take over only. More modern lenders are now of course focusing their efforts on offering much wider selections of terms. This allows customers to extend to much longer durations creating more management repayments. QuickQuid FlexCredit for instance caters 1 to 10 months and the MyMate Loans stretch from 7 days up to the full year.

Why are extended terms so important to go with? The common problem with monthly payday loans is that it can be difficult for some people to pay £400 in one lump sum when the end of the month is fast approaching. This kind of lending pattern is what gets people into problems, where they end up taking out more loans and the debt spiral begins. Having much smaller amounts going out across an extended payment structure won’t cause issues for most borrowers and so this should create lower default rates. I think that a balance of competitive pricing joined by a flexible term is what everyone should be really looking out for in a loan.