At Lending Stream, we’re often asked about our proposition, and how that fits into the market.
How are we different, for example? Lending Stream’s sole product is short-term loans, which provide a more manageable and realistic timeframe for repayment than a payday loan, which would typically be payable in a very short (usually less than 30 days) time frame, often unrealistic for both lender and borrower.
We recognise that 30 days is often not long enough for an individual’s financial situation to have been resolved. Our loans are paid back between three and six months, but on average, our customers pay back their loans over a four month period. This puts less pressure on the borrower in terms of paying back their loan, and provides a far more realistic timeframe for repayment.
As we set up agreements to have all of our short-term loans paid back in less than six months, judging such an offer through the APR mechanism is often inaccurate. The vast majority of short-term loans provided by Lending Stream will be paid back much quicker than over a twelve-month period and as such the APR rate is an inaccurate measurement for our customers. Over the shorter time frame of four months, for example, the ‘APR’ suddenly becomes quite different.
For example, if you borrow an amount of £100 for 30 days, you would only repay £130. However, when you present this figure as a daily and continuous compounding of interest it looks more like 3,000%.
We see that a short-term loan is certainly not for everyone and every member of our team appreciates that our offering caters for a specific market. Not everyone is lucky enough to have money put aside for a rainy day and Lending Stream is committed to helping people sort out an emergency financial need privately and in confidence.
At the same time, we’re confident that our robust procedures protect our existing and potential customers against unavoidable difficulties. We are dedicated to making sure that people who take loans from us are in a position to pay them back as agreed. We spend time getting to know our customers with this in mind – so that both parties involved are comfortable with the repayments. In fact, we refuse 90% of applicants per year.