Payday loans get a lot of people into serious financial trouble. These loans are easy to obtain because borrowers don’t need collateral. However, because the amount of the loan may be equal to the borrower’s next paycheck, they can be quite difficult to repay. Although some companies now give borrowers 45 days to repay their loans, the brief term often leaves people looking for other sources of funds to settle their payday loans.
Installment loans are an alternative to payday loans. These types of loans have many of the attractive features of payday loans but lack the short repayment term. An installment loan borrower may have up to six months to repay the money they borrow. Although they may pay more in overall interest, the extended term allows borrowers to avoid late fees and court costs associated with default.
The future for someone who takes out a payday loan could be bleak. If they are able to repay the loan on time, they may have to make sacrifices and have a difficult time making ends meet for quite a while. Eventually, that may lead them to another payday lender. On the other hand, a borrower who gets an installment loan from Maxlend Loans can have a bright future. Because the payments are small and spread out over several months, repaying the loan won’t cause financial hardship. After the loan has been repaid, these borrowers may form a new habit of saving money. Knowing they can afford to set aside the amount they paid the lender every month could lead them to save the same amount to build an emergency fund. This type of fund can help a family avoid financial distress in the future.
Financial struggles can get much worse when people choose payday loans over installment loans. By simply choosing an installment lender instead, people can avoid the problems associated with such short-term loans and after their loan has been repaid, actually start saving for the future. Loans are not meant to be a means of supplementing income and when they are used to pay ongoing expenses, people typically get into big financial trouble.