Installments are commonplace in most loans. Rather than having to repay in one chunk, you can spread this out over a number of months or even years. However, payday loans are a little bit different.

This short-term alternative to the conventional personal loan isn’t designed to be taken out for prolonged periods; in fact most are limited to a single month. At the end of this period the borrower will have to cover the amount in full. This is inclusive of the original loan, any charges and of course the interest that has been applied.

Whilst most lenders won’t actively advertise multiple installments as a repayment method, that isn’t to say that it isn’t possible. When you apply, you will be asked to agree on a date when funds will be automatically removed from your account. This should be set in stone as the ultimate deadline, although you can choose to manually provide funds earlier.

This is particularly effective when it comes to Internet-based payday loans charged on a daily basis. Small repayments as and when money becomes available can reduce the overall cost of borrowing, even just fractionally. Over the course of the month you could be able to pay off a sizeable chunk of the overall amount, possibly even the entire loan. Whilst this isn’t like traditional repayments, it is often as close as you can get to installments with a payday loan.

The limitations of a payday loan mean that you often won’t be able to borrow huge amounts and that you will only be given around 4 weeks to cover the full cost. Consequently, the necessity for installments is significantly reduced. The one-off repayment will be scheduled for the next time you are paid, which ensures that you have sufficient funds available on the agreed date.

If the length of the loan or the amount were significantly increased, then there would be a definite need for installments, otherwise the risk for the lender and borrower would be heightened. Risk is a major factor for payday loan companies to consider. As most don’t carry out the comprehensive checks that slow down other forms of lending, it’s imperative that customers meet all other criteria. If they were to offer four digit loans to first time applicants, they stand to lose much more money should the recipient default. However, by starting small and building trust with individual borrowers, they can begin to increase the amount available.

Even when you can borrow more, the need for and availability of installments is usually the same. The only time you may be offered the opportunity to cut your repayments into segments is in the event of multiple defaults. As the loan will continue accruing interest and charges, the total amount can soon become unmanageable. Rather than writing off the debt, some companies will agree to reduce the charges and agree a schedule for smaller repayments.

This is only enforced in exceptional circumstances and certainly shouldn’t be considered as an effective way of avoiding a one-off payment. The charges can be substantial and it will also inflict serious damage to your credit rating, which will only make a bad situation worse. So always make sure that you have the money available before applying as it could prove to be a costly error if you do not.

In the most part though, installments aren’t available within the short-term loan industry. This is simply a matter of necessity, or lack thereof, with most loans due to be repaid within a matter of a few days and covering a comparatively limited amount of money.

Vincent Rogers is a freelance writer who writes for a number of finance businesses. For Payday Loans, he recommends Payday Power Loans.

Vincent Rogers is a freelance writer who writes for a number of finance businesses. For Payday Loans, he recommends http://www.paydaypower.co.uk Payday Power Loans.

Author Bio: Vincent Rogers is a freelance writer who writes for a number of finance businesses. For Payday Loans, he recommends Payday Power Loans.

Category: Finances
Keywords: Payday Loans, Payday, Loan, Loans, Short Term Loans, Finance, UK