Things to Learn About Installment Loans as Alternatives to Payday Loans
An installment loan through a company like Maxlend Loans can be more convenient and useful than a payday loan. Installment loans do not have to be paid back in their entirety on the next payday. Instead, they are paid back over several installments. Usually the borrower can receive a higher amount than with a payday loan. A typical installment loan lasts for six months, with payments set up monthly or twice monthly. There should be no penalty for paying the entire amount of early.
Reading Loan Information
The prospective borrower can look at the loan schedule created after filling out an application. This shows the total amount to be borrowed, how much each installment payment will be, the interest rate, and how much the total to be paid in full will be if not wrapped up early. This information shows the customer how much the finance charge is in dollars and cents.
Lenders providing these loans usually want the borrowers to set up automatic withdrawals from a bank account or debit card for the payment due date. Borrowers typically can manage their account online. For instance, they may want to make a payment early for their own record keeping convenience. They can do that on the lender’s website.
As with payday loans, paying back the full amount as soon as possible is important because interest rates are high. These lending products are intended to provide borrowing opportunities for individuals who don’t have access to other forms of credit. They may have never built up a credit rating or their credit score may be low. That makes these borrowers a greater risk, since statistics show they are more likely to default on loans. That’s the reason for the higher interest rate; it offers some protection to the lenders.
An Option for Higher-Risk Borrowers
Interest rates for these loans are often criticized, but it’s the only feasible way for the lenders to offer borrowing opportunities to higher-risk customers. Hardworking individuals who need to pay for a major vehicle repair or an exceptionally large January heating bill are glad they have this option.