Lender in Focus 2.2: The Money Shop advantages

Lender in Focus 2.2: The Money Shop advantages

the-money-shop-advantages

The Money Shop offers short term loans. These loans are payday loan alternatives.

Loans are available over a  minimum of 3-month terms. They can be paid back over up to 12 months.

There are several Money Shop advantages that might make this lender a favourite in your opinion.

The Money Shop advantages: application options

Many providers of short term loans only operate online.

One of the advantages of borrowing from The Money Shop is that you can choose how you want to apply.

In-store loans

This lender has more than 200 branches across the UK and Ireland.

Most people will find a branch that is local and convenient. Some branches have also been refurbished and are designed to be family friendly.

Going in store to apply for a loan can help borrowers to feel more in control. You can speak to a real human being that will listen to your circumstances, and help you to evaluate your options.

You are not necessarily more likely to be approved for an in-store loan. But, you may find that an advisor makes a suggestion that you had not considered.

Being able to speak to someone, and receive a decision in person, is an advantage of applying with The Money Shop.

Online loans

You can apply for a loan online, at any time of the day or night. As long as your application is approved and finalised before 3 pm, the money should be with you on the same day.

Many people prefer online loan applications. They can be more convenient because you can apply from anywhere with an internet connection.

Another advantage of an online loan is that it offers more privacy. You can apply without speaking to anyone.

Online applications are usually subject to the decisions of computer algorithms. It will be up to you to choose the right loan amount and repayment term.

If your application is not approved, you may be less likely to get a loan elsewhere. This is because loan applications leave footprints on your credit file. However, The Money Shop’s online loan calculator can be used to fine-tune your application. You can assess affordability using your own household budget.

The Money Shop advantages: loan choices

Instalment loans

The Money Shop provides its short term loans as instalment loans. These can help you to spread the cost of your borrowing.

If you need to borrow a relatively small amount of money, then you will not have to repay in full before the month is over.

The smallest loan available is £100. Even this can be paid back over at least three months.

Instalment amounts can be very manageable, even for those on the lowest eligible income.

Payday loans and some instalment loans are available only over terms of up to 3 months. One of the advantages of The Money Shop is that you can have longer to repay your debt.

Other loans

The Money Shop provides a selection of loans. This is an advantage because it gives you choice.

You have a variety of products to choose from. The standard instalment loan may not be the most suitable.

Guarantor loans are the product with the lowest representative APR. For these, you will need an eligible guarantor that is willing to back your loan.

Secured loans are also available, through The Money Shop’s in-store pawnbroking service. These have two advantages.

The representative APR of a secured loan is lower than with The Money Shop’s standard short term loans. You may also have a better chance of approval because you are providing your own property in exchange for the money that you borrow.

If you are applying for a secured loan, it is important to weigh up the risks against the advantages.

The Money Shop advantages: interest rates and charges

All short term loans are subject to price caps, regulated by the Financial Conduct Authority.

These price caps keep the costs of loans in check so that they do not get out of hand.

But, lenders still have some flexibility with their pricing.

Costs can be compared using the APR. This estimates the cost of borrowing money over a full year. The APR calculation includes any fees and charges, as well as interest on the loan.

Instalment loan APR

The representative APR of an instalment loan from The Money Shop is 450%.

Wonga offers a 3 month Flexi Loan with a representative APR of 1,261%.

The APR of a loan from The Money Shop is one of the lender’s advantages. But, it is important to bear in mind that a loan’s Annual Percentage Rate is useful only for like-for-like comparison.

Short term loans and instalment loans are not intended for long-term borrowing. So, it is not always helpful to compare how much they would cost over a full 12 months.

 

Guarantor and secured loan APR

As well as its standard instalment loans, The Money Shop offers guarantor loans and pawnbroking services.

The APR for pawnbroking is 148%. For a guarantor loan, it is 49.7%.

Both of these alternative loans have APRs significantly lower than many other instalment loans and payday loans. These are forms of borrowing with lower interest rates, though there are extra risks to consider.

One of the advantages of The Money Shop is that there are cheaper loans available if you are eligible for them.

The Money Shop advantages: loan amounts

Because The Money Shop offers instalment loans over up to 12 months, it can offer large amounts of money than some providers of short term loans.

The longer repayment terms mean that larger loans can be paid back in more manageable monthly instalments.

The maximum loan from The Money Shop is £2,000. For comparison, Wonga’s largest loan is £500.

The extra money can be useful for house repairs of car purchases when a smaller loan might not be enough.

Higher value loans are one of The Money Shop’s advantages. But, it is important to understand that longer debts can become more expensive overall.

If you borrow £400 from The Money Shop over a total of 3 months, you will repay £547.95 overall. Borrowing the same over 6 months brings the total loan cost to £590.76.

The Money Shop advantages: summary

There are several potential advantages to borrowing from The Money Shop, in comparison to other short-term lenders.

The Money Shop has high street stores, which offer an alternative to online loans. Some people prefer this option. It can make the application process feel more personal.

For people that prefer applying for loans online, The Money Shop offers a website complete with online accounts for loan management.

The Money Shop offers instalment loans over terms of between 3 and 12 months. This makes repayment more flexible and can give consumers the option to borrow more than they would otherwise be able to.

The representative APR of a loan from The Money Shop is lower than some other lenders.

The Money Shop also offers pawnbroking services and guarantor loans. These are alternatives to short-term and payday loans and might suit some people better.

With 250 stores across the country, and online same day loans (when approved before 3 pm), The Money Shop has many advantages that make it a popular lender.

Learn about what customers think about this lender in the next chapter. Don’t forget to share if you liked it!