Payday Loans vs Installment Loans
Lately, there is a dramatic increase in the number of online lenders offering installment loans. Some firms add this service to their existing money online options while others replace payday loans with installment loans. The recorded shift makes a lot of sense granted that installment loans are schemes wherein the principal amount plus interest of the fast money loan can be spread over a period of time.
What Are The Other Reasons For The Shift?
Aside from the fact that installment loans offer the advantage of payments spread for days, weeks or months, here are some other must-know reasons:
1. Notice that some states have very strict regulations on payday loans. So for the fast money online lenders to continue their business, it is best that they shift to installment loans. From a legal standpoint, this strategy is genius.
2. Customers tend to appreciate installment loans better because they help pay down debt. If the fast money loan is equally divided, each installment becomes easily addressed. Soon, it will just become an ordinary part of your monthly budget instead of dedicating a huge amount just to pay for debts.
3. Installment loans are good alternatives to payday loans. They come in when you know that you can’t pay your fast money loan on your next payday and you cannot afford another loan term.
4. Installment loans are also cost-effective in terms of the operation costs because your lender will not need to execute a new loan agreement every two weeks.
But if your preferred fast money online lender does not offer installment loans yet, don’t be surprised. This is because the method of calculating the right interest for such loans is very tricky. Multiple installment loans is overly complicated and would need skilled and experienced lenders.
How Will You Know That You Need Installment or Payday Loans?
You will need payday loans if you have an immediate need for money that cannot wait for a couple more days. Tap the resources of a fast money online lender only if you are certain that you can pay the money back on your next payday. Typically, you can get as much as $1,500 for payday loans per transaction.
Meanwhile, installment loans are for bigger amounts. They are used to finance personal needs or larger purchases. Opt for installment loans if you have plenty to spare from your monthly budget.
Despite the differences in how these fast money transactions works, they have almost the same set of requirements. They would require no credit check so they’re perfect for you if even if you have bad credit or no credit history at all. They will only ask for the standard indentifying information like a duly filled out electronic form, a proof of US citizenship and age, a proof of stable employment and an active bank account.
If you successfully get money online for installment or payday loans, the funds can either be deposited to the account that you have provided or sent via MoneyGram. As for the payments, they will be automatically deducted the same account on your due date. So just make sure that you have enough funds in there to avoid additional fees as penalties. If there isn’t enough money there, you need to inform your lender at least 2 business days before the deduction so that arrangements can be made.
No matter which option you choose – be it installment or payday loans – always be responsible. You cannot just get money online now and then forget about it next. For every fast money loan that gets approved, you have the obligation to pay it back soon. This is the key for a smooth transaction that could lead to a better credit score for you.