The changing face of loans online

Thursday, 25/06/2015

In 2015, it appears that the popularity of payday loans is decreasing while the popularity of instalment loans is increasing. These alternatives to payday loans are easier to manage for the borrower and pose less risk - the advice for people needing to take a short-term loan is to look into instalment loans. 

The current economic climate has not improved noticeably for most people. It is a common occurrence for people to find themselves looking for short-term credit to meet the cost of a surprise bill or to make ends meet in the run-up to payday. For example, unexpected car breakdown costs, a bigger phone bill than expected or medical expenses - all of these can cause even the most savvy saver to need a short-term loan. 

Payday loans usually have to be fully paid in one go at the next payday. Instalment loans, on the other hand, mean the need to pay back to the entire amount in one sum is removed. This makes it a much more affordable option for many people to pay back. The problem with payday loans comes with the charges that are added on if the payment is late. Instalment loans give people who need to borrow a more practical and affordable option. 

Terms for instalment loans can spread repayments over a number of months, giving borrowers a certain amount to pay off at regular intervals. This gives people who have to take out short-term loans greater control and often better rates of APR than payday loans. All of this can help to prevent the borrower from falling into arrears, racking up charges and missing their repayments. 

Instalment loans can also help build the borrower's credit rating if they continue to make all payments on time. This does rely on the lender of the instalment loan reporting the actions of the borrower to the credit agency - something that is within the consumer's control. It is always worth asking the lender to make sure they make the report on the consumer's behalf.

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Warning: Late repayment can cause you serious money problems. For help, go to