The payday loans future. Do we know what it will look like? Nobody can predict the future right? 5 years ago, payday loans in the UK were completely different to what they are today. It’s fast become a multi-million pound industry throughout the UK. This makes it’s difficult to predict what the payday loans future will be like.
But it’s always fun to speculate…
The industry of short-term credit has become far more regulated. More so now than it was a couple of years ago. We think this is generally a good thing.
We believe it’s also something that’s likely to continue over the next few years. The talk of regulation has led to a decline in the perception of payday loans and similar. This is especially due to a perception that they’re expensive or a scam. The longer the regulation of the industry, it’s likely they’ll appear the same as other financial products.
What does the payday loans future hold?
The tighter regulation also means there will be fewer lenders than there are currently. This isn’t exactly crystal-ball stuff. There are already fewer lenders now than there were this time last year.
Also it means there will be many established brands, that will have worked in a way that’s fair to customers over time. So, these brands will likely be better regarded. One possibility is, as short-term credit becomes more mainstream, the mainstream may start to want to be more involved. High street lenders may want to offer products, where you won’t need an existing account.
Something almost certain to happen is lenders will have more information about you. Credit checking companies are getting better every year with the information they can share. The biggest change is that lenders will be able to see how many loans you’ve taken out in the past. Also if you currently have any payday loans outstanding. This information is then likely to become a mandatory part of the application process.
One outcome of this may mean you need to add more information as part of your application. Yet, the processing of that information is much faster than before. This could mean that more people are likely to receive rejections. Although it’s also possible that the restrictions allow for longer repayment periods if necessary.
As fewer lenders compete with each other, customers will understand more about payday loans. As more people get to know how they work they’ll be more able to compare loan offers properly. This could lead to more competition between lenders.
Final thoughts on the payday loans future
We believe the future is positive, especially for customers. As things get more regulated and quicker, they’ll be more transparent for customers. This can only be a good thing.