Payday loans are often criticized because borrowers have trouble paying the loans off on time since the arrangement is so short-term. The interest and the principal are due on the customer’s next payday, and that is simply unmanageable for many borrowers who took out the loan because they were struggling with expenses. Alternatives have become available from companies like the one represented on the website Bluetrustloans.com. This type of company offers installment loans that can be paid back over several payments instead of having the entire amount be due within just a couple of weeks.
Auto title loans are similarly criticized because they can lead to the repossession of the borrower’s vehicle. These loans may be easier to manage than payday loans, however, because several installments are usually allowed. Payday loan alternative installment loans do not require collateral, which makes them more appealing to people who do not want to risk losing their car, who do not own a car, or who are still making payments on the vehicle.
Borrowers should keep in mind that lenders consider these financial products to be high-risk loans, and thus they come with very high interest rates. The interest rate is not hidden, and borrowers will be made aware of the fees as well as the amount of their installment payments. They’ll be shown the total amount it will take to pay back the loan if they make each installment as scheduled. A better solution is to pay off the loan much faster, as this allows the customer to avoid a great deal of the interest fees. Reputable companies do not charge a penalty if the loan is paid off sooner than scheduled.
Because of the high interest rates, installment loans should usually be considered for emergency purposes only. The main exception to this would be if someone is absolutely certain he or she can pay the loan back in full within the first or second payment cycle, and taking out this loan provides the opportunity to buy something for an extremely cheap price. The actual fees paid will stay reasonably low because the money is paid back so quickly.