The payday loan business is booming, but this is not to say that this type of borrowing is often the best choice. In fact, most borrowers who end up taking out payday loans would do better to consider other types of financing entirely.
Lenders like Blue Trust Loans, for instance, regularly prove superior to their payday-style competitors in a number of ways. Understanding why an installment-type loan can be more useful than a payday one will make this fact clear.
A Better Way to Borrow in Many Common Cases
Payday loans have become so popular largely because they often seem so accessible and convenient. Many towns and cities today feature one or more of these types of businesses, and it will generally take nothing more than a quick visit to secure a loan.
While that appeals to many borrowers who find themselves facing financial pressure, it will often make much more sense to take a step back and consider another option. Lenders based online who extend loans that are repaid in installments can almost always make a stronger case for a given borrower’s business. Some of the ways by which such lenders most often win out in a fair analysis include advantages with regard to:
- Flexibility. When a payday loan is taken out, an automatic withdrawal sufficient to repay it in full will normally be scheduled at the same time. As a result, borrowers who make use of this type of financing typically find themselves with only a limited window of financial freedom to use to get back on track. Installment-style lenders, on the other hand, will generally allow borrowers to extend their loan terms over longer periods. Instead of needing to take out several expensive payday loans in succession, that can mean being able to focus on recovering.
- Generosity. Payday lenders will rarely extend very large loans to their clients, as they seek to limit their exposure to risk in just about every case. Installment-type lenders, on the other hand, will often be happy to offer larger loans.
More Payday Borrowers are Looking into the Alternatives
Thanks to advantages like these and others, more borrowers are finding themselves leaning toward installment lenders rather than the payday lending companies that would have earned their business in the past. Understanding the options and how to make the best possible use of each will pay off in every case.