Lending Stream

Lending Stream

February 03, 2010 01:00 ET

Lending Stream Payday Loans Goes One Up On Banks

EDGWARE, UNITED KINGDOM--(Marketwire - Feb. 3, 2010) - Steve and Harry were both feeling the pinch of the economic crisis. Leaner pay cheques, rising commodity prices and strained monthly budgets forced them to look for credit options to bring their finances back on track. While Harry took the conventional route, choosing to go £80 overdraft on his account, Steve researched more extensively and opted for a payday loan from Lending Stream. At the outset, it appeared to Steve that he had made a costly mistake by ignoring critical observations about the expensive nature of payday loans. However, by the time he received his next pay cheque and repaid his loan successfully, it was established that Harry had got the raw deal instead.

Harry's decision to use an unplanned overdraft for just three days cost him a whopping £60. Steve, on the other hand, used a £80 payday loan over a 30-day period and ended up paying a relatively small charge of £20. It is evident that banks are not always the best option when you are facing a cash shortfall.

A spokesperson from Lending Stream commented, "Although we have faced some sharp criticism for the perceivably high interest rates, we believe we are less expensive than some of the traditional cash options like credit cards and unplanned bank overdrafts. Our APR's might suggest that our loans are not a sensible option. But the fact remains that we lend only on a short-term basis and hence, it is only the monthly interest rate that needs to be taken into account."

A spokesperson added "We received a comment from one of our valued customers saying the typical APR was misleading and deceptive. To address all our customers who have doubts on the APR, we put in as much effort as we could all muster up into creating a simple and customer friendly explanation of this complexity. Though most of us know the fact that APR's do not matter for short term loans like ours, we feel inclined to putting their minds at rest."

Responsible lending by companies like Lending Stream has quelled some of the common apprehensions that people have about payday loans. Of course, finance charges of £25 for every £100 borrowed (30 days) may not be wallet-friendly; but the speed, convenience and flexibility offered certainly make the cost look reasonable. When you are strapped for cash during the crisis, an online loan that materialises in a day and does not leave you with bigger debts is a practical choice.

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