Monthly installment loans usually increase the effective interest rate of borrowing by approximately 2 times the stated interest rate.

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This statement is generally true because monthly installment loans require borrowers to pay interest on the outstanding balance every month, which results in more interest paid over the life of the loan compared to a loan with a one-time interest charge. This increase in interest paid can result in an effective interest rate that is approximately 2 times the stated interest rate. However, the actual increase in the effective interest rate may vary depending on factors such as the loan amount, term, and repayment frequency.

Monthly Installment Loans Usually Increase the Effective Interest Rate of Borrowing