Real managers use it in real life mate, that is why it is an option!
to answer your question, if you can afford to buy players in full, do it as your future Transfer Budgets will not be affected and you wont be owing money every month!
if you have no money but you would like to buy in some key players, then use the 48 month option, just remember though, that you are going to be paying money every month for 4 years and if you do this for say 4 players, you could easily be paying close on and more than 1million a month.... which is alot of money and can lead to bankrupcy and even Administration...
if you are going to do this method (which we all do) then you are going to have to start winning some competitions and getting placed well in the League (European Qualifications etc etc) to enusre that you can generate the money that is owing...
another method that I use is that instead of selling players for upfront cash, I sell them over a 48 month period, I try and get to a point that the money I am spending every month for my new player is countered by the money coming in from my old player... and even more so that I would be getting in money every month rather than spending...
so the moral of this story is:
1) Do it for key players, but ensure that you do not over do it
2) For the 1m player, do it over 48 months as you will only be paying 21k a month
for 4 years which is not much...
3) Be sure to try and counter the expenditure by selling players over 48 months