The future of short-term lending appears to be subject to near constant debate. In many quarters payday or same day loans have proven to be hugely controversial. This has led to calls for tighter rules and governance within the industry, with some people even seeking an APR cap to prevent interest rates that run in to the thousands of percent mark.

However, despite the media furore, applications have continued to grow steadily – year after year. Whilst this might baffle some, advocates of borrowing alternatives point to the many benefits that they provide – particularly to those who have been unable to get credit elsewhere. So what is the real reason behind the huge growth of same day loans and can this continue for another 10 years?

Same day loans are essentially tailored for people who are looking to secure a small amount of cash to tide them over for a few weeks. As credit checks and other borrowing restrictions are much more relaxed, they are open to a much broader cross-section of society. This means that even borrowers with a poor rating can still successfully apply for cash. Herein lies the major problem and benefit of short-term lending.

Critics point to this as a form of exploitation, claiming that lenders are deliberately targeting vulnerable people. However, on the flipside, same day loans have been used by many people to steer clear of costly defaults and enabled them to remain in control of their debt. For many people, there simply isn’t an alternative. Either they secure a same day loan, or face further monetary hardships.

As a result, the success of this form of borrowing has been largely based on the failure of the financial markets around the world. People simply don’t have access to the credit that was available a decade ago. With banks becoming increasingly frugal with the distribution of their funds, many people are becoming desperate. Inevitably, this has led to some turning to alternative sources of cash to get through the toughest of situations.

In many regards, the comparative failure of traditional banking has boosted the popularity of the newer, more inclusive short term loan industry. Whether this will continue indefinitely, particularly if long term borrowing becomes more accessible again, remains to be seen. However, with the increasing public awareness of same day loans and rising applications, there’s certainly no reason to suggest that popularity is about to plateau, let alone drop.

10 years is a long time though. A decade ago it would be almost unimaginable that short-term lending would be as popular or widespread as it is today. Whilst it has existed in some capacity for centuries, the rise of online lenders has helped to propel it into a different stratosphere entirely. The ease with which they can be obtained, coupled with their unrivalled speed, has resulted in millions of applications each month in the UK alone.

The demand is such that more companies are jumping on the bandwagon, either offering a full lending service or acting as a broker between customers and lenders. Whilst there could certainly be changes to the way in which same day loans are governed and the freedom of companies operating within the market, there doesn’t appear to be anything that is likely to derail the runaway success of this form of borrowing.

Trends, by their very nature, only have a certain shelf life. But it would appear that same day loans are more than just a fly-by-night fad. In many ways, they have become the leading alternative to the old-guard of credit opportunities. With quickening decision rates and transfers, their convenience is unparalleled. Plus, with the only prerequisite being a regular salary, they are available to most people. All of this means that their popularity shows no sign of abating now, or even in the coming years.

Vincent Rogers is a finance writer who writes for a number of finance businesses. For quick payday loans, he recommends Paydaypower.co.uk

Vincent Rogers is a finance writer who writes for a number of finance businesses. For quick payday loans, he recommends http://Paydaypower.co.uk

Author Bio: Vincent Rogers is a finance writer who writes for a number of finance businesses. For quick payday loans, he recommends Paydaypower.co.uk

Category: Finances
Keywords: Payday Loans, Payday, Loan, Loans, Short Term Loans, Finance, UK