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The instalment loan sector has been one of the fastest growing markets in subprime lending. Many of the newcomers are focusing on these extended terms, rather than providing monthly payday loans that at one time was the type of product that everyone was looking to take on. This post covering 3 month loans vs 6 month loans will provide some insights on which of these two terms makes the most sense to select. One initial note is that many of the popular instalment loan providers do cater both 3 and 6 month periods. This includes MyMate, Oakam, Satsuma Loans and QuickQuid FlexCredit who all provide some of the lowest sector rates.

There are a few lenders that stick with just one though. For instance, Wizz Cash cover 3 months and Lending Stream cover 6. Either way, in general most of the popular names can provide you with either to select. A major limitation with a payday loan carrying a 30 day term is that when the repayment arrives the customer has to repay back a lump sum of let’s say £300 or £400. If personal circumstances change and the customer runs into problems then they may rollover the loan (with a new full charge) or they may find another lender to pay it off. This is how debts can start to spiral and defaults then occur.

The advantage in using a 3 or 6 month term is that in their selection the balance is spread over a longer period that lowers the individual payments creating a more management repayment structure. The cost of these instalment products is much cheaper than alternatively continually rollover over a payday loan. The customer in this regard is happy and so is the lender. The longer the agreement, the more money they make. This concept has been best adapted in the credit card sector that has continually thrived. When it comes to the choice between 3 month loans vs 6 months loans, each selection is recommended to use.

You do get a better deal when you choose 6 with the daily rate being lower, but obviously you end up paying more over the extended term. If you choose 6 then you can usually make early settlements with the major providers. In this instance, you should be able to settle after just 3 and receive a rebate. With this in mind, choosing a 6 month loan term would be the best option. At least this way you can spread the balance out as much as possible. You could otherwise pick a lender that caters a full year. The costs gets expensive here though with this period suiting borrowing in the thousands.