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Pay in Installments or Full: Which is Better?

A debt collection agency will almost always allow you to make payments in installments. Should a borrower/debtor go for it or not?

Benefits of Paying in Full (in one lump sum payment)

  • You will likely strike a deal to settle the debt for a lower amount (keep insisting). Installments result in more work for collection agencies. They would rather accept a lower amount ( like a 10% or a 20% lower settlement) than linger a debt for months. Moreover, if a borrower misseses an installment, it results in even more work for them.
  • Peace of mind. The matter is closed, and there are no pestering reminder calls each month from a debt collector.
  • If you have cash available or can arrange it, then it is best to close the matter in one lump sum payment rather than dragging the matter. Debt collectors are persistent callers, they get paid a commission on whatever you pay, and they will keep pestering you till the payment is made. 

Benefits of paying in installments

  • The borrower who pays in installments has effectively communicated to the debt collector that he does not have a bunch of money sitting in the bank. He is genuinely tight on cash. He can usually settle the deal on the principal amount only and avoid paying any additional interest and fees.
  • It gives more time to pay and avoid immediate cash flow problems. 

Benefits of Both (Installments and Full Payment):

  • You avoid damaging your credit report.
  • No more harassment from collection agencies or their lawyers.

Filed Under: Debt Recovery

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    Note: Nexa is an information portal that helps businesses and medical practices to find a good collection agency at no cost to them. We are not a collection agency. We do not perform any collection activity, nor take payments, nor do any credit reporting. Leads shared with shortlisted agencies with Low Contingency Fee and High Recovery rates.

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    Copyright: Nexa Collections | 2021
    All information on this website is for general information only and is not an experts advice. We do not own any responsibility for correctness or authenticity of the information, or any loss or injury resulting from it. Nexa is not a collection agency. Relevant inquiries are contacted by our shortlisted collection agency partner(s)
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