Installment Loans vs Payday Loans

When you’re down on your luck and need money quickly, there are plenty of options out there for you. Some people have family or friends that they can borrow money from, while others can access bank loans or other lending opportunities. However, not everyone has these options, or may have poor credit that prevents them from borrowing. Even if this is the case for you, it doesn’t mean that you’re out of luck! You may still be eligible for a payday loan or an installment loan, from a local provider.

Depending on your unique circumstances, one of these options may be better for you. It’s important to know the similarities and the differences between these types of loans, so you can make the best choice for your situation. Here are a few facts about payday loans and installment loans!

Payday Loans

Payday loans can be a good option for those who have poor credit or no credit, who need a small amount of cash to get them through to their next paycheck, or for a minor emergency expense. These loans are typically for amounts under $1000, and may come with higher interest rates or fees. Payday loans are paid off quickly, usually within a month, and may be a good short-term solution for when you need cash fast.

One great thing about payday loans is they often don’t include a credit check- just typically an income and identity verification. They also are simple- no extended repayments or complicated rates. You can get the money you need, to take care of your bills, pay it off, and move on with your life. A hassle-free solution for many!

Installment Loans

Installment loans are a potential option for when you need a larger amount of money, and need a longer time to pay it back. These often come with lower interest rates, but are usually subject to a credit check, with your rates based on your credit worthiness. If you have decent credit, and need a large lump sum of money to take care of things like medical expenses, car repairs, or other emergencies, an installment loan may be a good choice for you.

Repaying your installment loans is easy, with routinely scheduled, fixed-amount payments over the course of several months, up to a year or more. Some lenders offer secured and unsecured installment loans, with secured loans requiring collateral, but potentially lowering your interest rate and overall risk. Unsecured loans may be a little harder to obtain, but still offer the same large sum of money, with extended repayments.

Both payday loans and installment loans can be useful tools in managing your finances. Depending on your needs, your income, your credit, and your goals, one may be a better choice for you. Your local lender can help you decide which is best, and guide you through the application process.