Table of Contents
Table of Contents
Installment loans are given in sums ranging from $1k to $5k. You could wish to build a swimming pool in your backyard or modify your kitchen. Getting an installment loan makes the execution of these projects straightforward to execute. One of the major advantages of an installment loan is that it guarantees a lengthy term ranging from 6-60 months which gives you enough time to pay back the amount borrowed. When you take out instalment loan, a deal is struck to repay it back in monthly installments. The money should be repaid in monthly payments over a certain period. You may, however, repay the whole sum in one go if you have the funds available. There are no repercussions.
This installment loan does not involve a thorough credit check or faxing. You have no need for a guarantor or collateral with online and in-store lenders, and cash may be paid to your bank account as soon as one to two business days.
Differences Between Installment and Payday Loans
After reading the preceding description, you should have a better understanding of what an instalment loan entails. In order to grasp the distinctions between installment and payday loans, you must first understand what a payday loan is.
Payday loans or “cash advances” are quick to get and easy to qualify for if the applicant is employed. Money advances of up to $1000 can be authorized in as little as 15 minutes. Cash advances are also unsecured, which means you don’t have to put any of your valuables at risk, and there is a 14-day cooling-off period. Finally, you can acquire them even if your credit is low.
An installment loan is a small sum of money that you take out over time, typically with a set amount of repayments each month. With an installment loan, you are guaranteed a fixed rate of interest for the entire length of the borrowing.
There are two main types of installment loans: short-term and long- term. Short-term installment loans are usually for between six and 12 months and have fixed rates of interest from 6 percent to 24 percent. Long-term installment loans are usually for more than one year and have fixed rates from 3 percent to 15 percent.
Distinction Between Installment and Payday Loans
|TYPES OF LOAN||CASH ADVANCES||CREDIT CARD REQUIREMENT||LOAN TERM||COLLATERAL OR GUARANTOR|
|Instalment Loan||$1,000-$5,000||Available for Bad Credits||6-60 Months||None|
|Payday Loans||$100-$1,000||Available for Bad Credit||14-31 Days||None|
The Benefits of an Installment Loan
An installment loan is a type of loan where you make repayments over a set amount of time, usually ranging from several months to a year. The benefits of an installment loan include the following:
With an installment loan, your monthly payments are fixed, regardless of how much money you earn or spend. This makes it easier for you to budget and reduce your overall borrowing costs.
Lower Interest Rates
installment loans often have lower interest rates than other types of loans, which can make the total cost of the loan more affordable over the long term.
More Flexible Repayment Options
With an installment loan, you can choose from a variety of repayment options, including prepayment penalties and extended payment terms. This means that you can adjust your payment schedule to fit your financial needs and preferences.