Installment Loans and how they Compare

Installment loans can help consumers with another method in which to borrow a small sum of money. Traditionally installment loans have been offered by larger suppliers of credit based facilities and it is only in the last few years that installment loans have become a popular choice within the short term loans market also. Nowadays it is just as common to find an installment loans lender within the short term borrowing market as it is in the longer term borrowing market. Installment loans are therefore one of the newer methods of borrowing with the online market of small loans. The purpose of these online loans is not to replace larger scale borrowing choices but to instead gives consumers a route to smaller borrowing choices, should such a resource be needed.

Installment Loans and how they Compare

Installment loans are often a preferred choice amongst consumers when an unexpected or unplanned bill arises. This means anything which had not originally been budgeted for. These types of costs can sadly strike at any time and when they do they can often require our immediate attention. Take for example an ill pet, which is in need of vet visit or a broken washing machine in the family home. In either example, it is very difficult to know if and when such costs may arise but when they do, they are often considered urgent in nature. This is why over the years installment loans and other short term borrowing choices have become a firm favourite amongst consumers who face unexpected costs of this nature.

In the earlier years of short term borrowing the most commonly offered product was the payday loan. The payday loan allowed borrowing to be achieved providing the customer would agree to repay the entire loan as a lump sum repayment on their next employment pay day. This meant that typically, borrowing in this manner never lasted any longer than a number of weeks, given most consumers monthly pay frequency. This meant customers of the payday loan product would agree to repay the loan as a lump sum repayment, which could often see the payment amount due run into several hundreds of pounds. This is why in more recent times the installment loans have become the more popular borrowing choice within the short term loan market. Instead of asking that the customer commit to a single and sizable one-off repayment, installment loans allow customers to select a repayment term which is individually suited to their existing financial concerns. Most lenders of installment loans offer a range of repayment terms, whether that be 3, 5 or 6 months or even as many as 12 months. This allows the opportunity for customers to compare the overall costs as well as the variation in the monthly instalment due; depending on the period of repayment chosen. Many consumers opt for the shorter terms where it is affordable to do so and in doing so reduce the overall amount payable compared directly with the costs of the longer terms available.