Consumer installment loans offered by nonbank lenders can be an expensive form of credit that keeps borrowers in costly long-term debt. Lenders offer these loans to individuals for their personal or household use. Consumers borrow between $1,000 to $25,000 or more. Many states regulate the costs and other terms of these loans, usually requiring them to be repaid monthly over at least 12 months and no more than five years. Many nonbank lenders charge interest, fees, and other costs that make these loans more expensive than personal loans banks and credit unions offer.
Some installment lenders also take advantage of state and federal laws that allow them to push additional products and services that pad their profits or use misleading tactics to keep borrowers locked into loans with higher payments.