Payday loans are a whole mess of trouble based on how they are designed. Payday loans rely on a push of income at a single time. The repayment of the loan is also expected in a lump sum, typically the day after a payday. Subsequently, an entire future paycheck is just shoved right to a previous loan, leaving the borrower in the same hole they got into the first time.
How Short-Term Installments Work
Installment loans break the repayment up into logical installments. Borrowers will not have to exhaust their entire paycheck and end up where they started. They can stagger payments over a few months and face lower interest and fairer terms along the way. It is a more forgivable system, but it is not without some disclaimers. Borrowing should always be done responsibly and only when it is absolutely required.
Loans from Maxlend.com use a different basic system. Firstly, the cap is far more forgivable. Borrowers will not be able to exceed $1,250. Payday loan providers hardly hesitate to allow a borrower to take $3,000 or more requiring payment after the next payday. This can place them in an unfair hole, especially when a late payment is of[ten nearly a third of the total loan value. It is a destructive cycle.
Installment loans have lower interest rates. Though it is worth saying that the loan should be paid back in the agreed upon terms. Paying back a loan late is always cause for concern. Installment lending allows borrowers room to breathe. Installment plans are useful for small bursts of additional income over a period of time. The income is not a game changer, but it may be enough to help pass a roadblock. A payday loan is different. It is an adrenaline rush of money- and it is expected to be paid back much sooner than later with little mercy.
Neither borrowing method is completely sound. All borrowers should confirm that they will have the resources, soon, to pay back the loan properly. Whether the lender is a payday provider or an installment provider, they all want borrowers to be responsible in what they can handle.