What makes an installment lender “traditional”? Traditional means long-established, which is an accurate description of this type of lending. Traditional installment lenders can trace their origins back to 1878 and the Industrial Revolution.
As workers moved from rural areas to urban cities, they found they needed small loans to purchase goods and services or supply them with cash between paychecks. The traditional installment loan model persists today because it works; it is effective and affordable for consumers and profitable for the company. Simply put, a consumer borrows currency with an agreement to repay the amount borrowed over a specified period of time, including a percentage of profit for the lender. This type of loan has been made since currency has existed.
Traditional installment loans stem from an historic, effective foundation that is mutually beneficial for both the lender and the consumer.