Installment loans are widely being hailed as the new form of payday loan borrowing. As such, many lenders who operate within the online short term loans market now do so by operating an instalment based lending model. It has become clear over the last few years that short term loans were somewhat lacking in terms of flexibility and therefore true ability to meet the realistic needs of the modern day consumer. For many years, dating back to the early 1990’s in fact, lenders of short term borrowing resources via an online means did so via a very specific type of borrowing. As the vast majority of us will already be aware, this was known as the payday loan. Unlike installment loans the payday loan did not provide a range of repayment options and instead focused on being a very short in repayment nature type of borrowing. As the name of the product clearly indicates, payday loans worked on the clear understanding that approved loans would be repaid on the customers next pay date and this meant full repayment, including interest. The payday loan was undoubtedly a great introduction to short term and small value borrowing but like some many consumer markets, the conditions and circumstances of customers using the product revolved over the years and therefore there became a need for lenders of these loans to ensure the product was able to follow suit.
The result of the above is the modern day success of installment loans. Able to offer the fundamentals of the payday loan but with a key difference; flexibility, installment loans are quickly becoming the only choice used by modern day consumers. Like so many consumer markets short term loans have had to adapt to reflect the preferred manner of repayment used by most consumers and this is one of choice. Consumers are now used to using the internet to hunt out deals and find repayment options for the goods and services they require which work as they need them to and this often means repayments which can be spread out. Whether its home lending, store credit, store cards or even credit cards, the modern day consumer is used to having to manage their money based commitments in monthly based repayments; instead of having to repay in a single and out-right basis. This is fundamentally why installment loans have become so popular. They are similar to payday loans thanks to their online application process and ability to consider loans ranging from £100.00 to £500.00 typically but the difference can be seen in the options for repayment. Unlike payday loans, the lenders of installment loans allow their customers the ability to select a repayment term which is pre-agreed for repayment over a number of months. So instead of repaying a small loan as a lump sum this could mean 2 monthly repayments, or 3 or 4 or perhaps as many as 6, if it is suitable and affordable to do so. Installment loans are an exciting and consumer friendly version of online borrowing.