Since the credit crunch, around five years ago, lenders have found it increasing difficult to acquire funds from banks and other financial organisations. As a result, many have turned to payday lending companies e.g. Wonga South Africa, to tide them over with short term credit until their next payday. Payday loans are a ‘last resort’ for emergency financial situations, such as unexpected bills or home repairs and on many occasions. It’s important to remember that these loans are not designed to be a regular staple of your budget, they’re only for short term emergency use and should be paid back as quickly as possible. Unfortunately there’s evidence that a small percentage of users are using them incorrectly.
As well as being a household name in the UK, Wonga have also grown throughout other parts of the globe and now have a presence in Spain, Canada and Poland. They’re rapidly growing their customer base in South Africa with over a million customers served already. The solidification of big brands in the short term lending market has helped reduce the risk to customers of loan sharking from smaller websites with less credibility.
There are a few advantages to these types of loan when used for short term lending purposes. One being that although you’re still required to undergo a credit check, these are usually a lot less restrictive than bank loan applications. The quick access to the funds is another fundamental benefit of using a payday loan, particularly for unexpected bills, which could otherwise cause a lot of stress and worry. As long as you have a bank account, you are over 18 and have an income, you are typically entitled to apply for a payday loan. You may be asked for proof of your income, such as pay slips, bank statements or tax returns.
The Future of online lending
With the financial situation as it is for many people, it seems that payday lending will always be part of the lives of many and if used in the way it was intended, it can help to alleviate urgent money worries. There are always times in our life when we aren’t quite prepared financially for unexpected costs and with access to payday loans, it can often save the hassle and stress which comes with being unable to make payments.