The Ideal Repayment Term for Payday Installment Loans

Payday installment loans have a fixed repayment term. It could be ninety days or up to a hundred and eighty days. Repayment terms are rarely longer than six months, unless the loan amount is substantially higher. If you are borrowing less than a grand, then your repayment term is likely to be capped within six months. If you borrow more, then you may get up to a year to repay. There is no ideal repayment term for everyone, given the difference in loan amounts and the varying affordability. The ideal repayment term is always contextual.

Private lenders tend to promote ninety days, three months or six months as typical repayment terms. You can always opt for two months, four months or eight months. The lender will have to approve the term but you can always ask for one that is not exactly the norm. Private lenders are more flexible than banks. Whenever you choose a specific repayment term, your priority should be assessing your affordability and whether or not the monthly installment is easily manageable. Do not dwell too much on the quantum of interest accrued over the months. If you opt for a longer repayment term, you will be paying more interest. However, it is better to pay a bit more in interest than to default on a loan. A shorter repayment term will always have a steeper monthly obligation.

Do the math to ascertain how much money you can conveniently repay every month. If the monthly installment is within that threshold, then you have a suitable repayment term. Else, you must opt for a longer repayment term and reduce the monthly liability. This is the safest way to avoid a cycle of debt. Defaulting on payday installment loans carries hefty penalties. There may be a provision of extending the repayment term depending on the policy of a lender. Explore this option as well if you think you are going to default on a repayment.

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