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The Development of Installment Loans as Alternatives to Payday Lending
For many years, payday loans have provided a way for people to obtain fast cash when they don't have any other way to borrow money. Unfortunately, the amount of the loan can be relatively low because the entire amount is to be paid back on the customer's next payday. Many borrowers have trouble even paying that amount back so quickly. A company like Max Lend offers alternatives to payday loans that can be better suited to the customer's needs. Longer-term installment loans provide more money and more affordable payments with a longer repayment schedule.
Why Installment Loans Were Developed
Installment loans were formulated by the lending industry as an alternative to the problems so many borrowers encountered when trying to pay payday loans back within two weeks. Often, they wound up simply paying the interest and then refinancing, having to pay more finance charges in another two weeks. Even now, many U.S. residents are still struggling with the aftereffects of the Great Recession, and they don't have any sort of nest egg that would pay for emergency expenses.
Ease of the Process
The application process for these loan opportunities is simple compared with all the paperwork, credit checks and proof of income that would be required to qualify for a bank loan. Income verification is required by a company like Max Lend, but there is no credit check and the application can be filled out quickly online. A person who feels embarrassed about having to borrow money never needs to talk with any representatives in person. Most people with some form of steady income qualify for these loans.
Reasons to Use Installment Loans
Alternative installment loans are usually intended for emergency purposes, although they might be used for other reasons if managed in an intelligent way. For instance, someone might have the opportunity to buy a good used car at a very cheap price, but cannot come up with all the cash. This person might sit down and figure out how much extra the car would cost if he or she borrowed the money for it with an installment loan and then paid that loan back within two or three months.
This project was last updated 2 months ago