Installment loans are multi-payment loans that can be paid back over the course of a longer period of time than payday loans. Maxlend Loans offers six-month repayment periods for qualifying customers. Before taking out an installment loan, though, readers can find out more by checking out a few of the pros and cons of this form of borrowing.
Pro: Easy-to-Manage Installments
Arguably the biggest advantage of installment loans is that borrowers get to break down the larger sum of money they’ve borrowed into smaller, manageable payments. This gives them more flexibility in regards to repayment than payday loans, which generally must be repaid in one lump sum, making it more feasible to stay on top of payments even on a budget.
Con: Eligibility Issues
Not all borrowers will be eligible for installment loans. Although this is listed as a con, the intention of creating eligibility criteria is to prevent borrowers from winding up with large amounts of debt they can’t handle. If a borrower doesn’t have adequate verified income, they really shouldn’t be taking out a loan.
Pro: Fixed Payments
Borrowers taking out installment loans will know exactly what they’re expected to pay back in advance. They can work with their lenders to understand loan interest rates and prevent unpleasant surprises, such as jumps in APR, which should remain fixed throughout their loan repayment periods. This allows readers to better manage their finances.
Con: Not All Lenders are Reputable
It can be hard to choose a lender since not all financial institutions that offer installment loans are equally reputable. Winding up with too much debt can be avoided by doing some due diligence prior to signing a contract, though. Look into things like interest rates, the amortization of payments, and fees associated with paying the loan off early to avoid working with a lender that uses predatory lending practices.
For most readers, the advantages of installment loans will outweigh the disadvantages provided they qualify for the loans. Lenders offering installment loans are much less likely to engage in predatory practices than payday and title lenders. Just make sure to do some research into the company and read through the terms of the loan carefully before signing on the dotted line.