Sometimes it’s just nice to be flexible, none more so than when it comes to your finances. Flexibility continues to be something we prioritise, perhaps highlighted by the 54% of workers who are now able to enjoy flexible working. Whether you’re changing your social plans at short notice or looking for flexibility in your working hours, there are many avenues where being flexible can benefit you, and having flexible repayment loans is no different. But are they all they’re cracked up to be? Amongst all of the seemingly good benefits, are there any downsides you need to be aware of? Is there a cost to the convenience of being flexible? Keep reading to find out.
Flexible Loans Online That Work For You
The need for flexibility with lending products is something many people are actively looking for when searching for a loan online. This can mean a few different things depending on what a consumer wants to achieve. Maybe you need longer to pay an amount back, or you need to take a repayment holiday so you can focus your money on another expense? Flexibility when it comes to financing is all about providing consumers with options.
At the end of January 2020, personal lending in the UK increased by £48.7 billion to £1,680 billion compared to the previous year. This equates to an additional £923 per UK adult. By having flexible repayment loans, consumers are able to see what they will be paying back before they start, adjusting what they want to borrow and for how long for with ease. No-one wants to be paying back more than they should.
Take our short term loans, for example. Our short term loans can be viewed as flexible short loans by some in that they allow you to spread the cost of the amount you want over manageable repayment terms. If you find yourself able to pay the loan quicker, you have the flexibility to do so and clear the debt in full. Similarly, to a payday loan, you can choose a flexible repayment length, from 1 to 36 months with some providers. Some lenders are also able to offer a loan from £50 up to £1,000. This does offer consumers with a lot of flexibility but at what cost? Payday loans are a form of high-cost short term credit, which means they have a much higher interest rate than standard personal loans. They allow consumers to cope with a financial emergency between paydays and get back to normal as soon as possible. This can be appealing to consumers who need an emergency loan or to get out of a tight spot. They should, however, consider all the available options due to the high-interest rates involved and ensure they can make the required repayments on time.
It’s not just consumers looking for the positives in flexible finance. Businesses turn to asset finance or bridging loans to be able to purchase anything from property to equipment, especially if funds are short.This type of finance is flexible in allowing a business longer to repay or provide money upfront much quicker. Aside from businesses back in the consumer sector, mortgages have long had flexible options to help. From being able to make overpayments to clear the debt quicker, to even underpayments if money is tight, it makes sense that in 2020 low-rate flexible loans have become a normality. Even the UK government has introduced flexibility when it comes to consumer debt, bringing in a 60 day breathing period for those in financial difficulties.
Flexible Repayment Loans – The Downside
For all that is good about flexible loans online, there are some negative impacts, especially if they are not managed properly. Some lenders will provide you with flexibility but at the expense of much longer repayment terms than you would need. You could be tempted to take out a loan for double the amount of time than you need. For example, a loan for £5,000 over 5 years when you can afford to pay it back in 2. The reason this will have an impact is in terms of total interest. This can heavily fluctuate depending on the length of the loan. This needs to be carefully considered with any form of lending that provides a flexible term, as you could pay back more than you need to.
Additionally, the more flexibility you want from a finance product, the fewer options you’ll find. As well as the lender being flexible for you, you’ll need to be reasonable with the flexible options you require. Much like with many people looking for flexible working conditions, many employers may not be able to accommodate this. You may find you’ll only have options from less trusted lenders with the more flexible repayment loans you need.
With all the need for further flexibility in finance, this has caused an issue for traditional lenders. Adapting to consumer change is difficult, and the FinTech companies have been at the forefront of this. The advancement of mobile technology and start-ups has made life difficult for financial institutions. Many of them base their lending on outdated legacy systems, meaning they are slow to change due to the legalities involved, with almost 50% of financial services still in the infancy of a digital transformation. Becoming more flexible isn’t just a consumer issue.
Similar to any lending product, to take advantage of low-rate flexible loans, you need to look in the right places. As long as you have worked out what you can afford to pay and stick to it, you can benefit from flexible repayments. Also, checking the amount of interest you will be expected to pay back can ensure you’re not in debt for longer than necessary. Here at Wizzcash, we can offer positive flexibility when it comes to providing instant, short term loans. You can choose exactly what you want up to £1,000 with no early repayment fees. If you need any more information about our lending products, please browse the website, or contact us directly.