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Installment Loans Vs. Payday Loans – Breaking Down The Differences

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installment loans

If you’re in need of some extra emergency cash, you may be wondering what options are available to you. Two of the most common types of loan are personal installment loans and payday loans.

Wondering what the difference is between an installment loan and a payday loan? The team at Mypaydayloan.com is here with a quick guide that will help you understand the pros – and cons – of each type of loan!

Installment Loans – Understanding The Basics

There are many types of installment loan. Technically, mortgages and auto loans are installment loans, as are student loans. However, for our purposes, we’ll only focus on a particular type of installment loan – personal loans.

Personal loans are a type of unsecured loan. That means they do not require collateral. Mortgages, for example, use your house as collateral, and auto loans use your vehicle as collateral. But a personal installment loan does not require collateral. 

Personal loans are usually taken out by people who need extra cash – for car and home repairs, or for emergency medical bills. They are also sometimes used to consolidate debt.

To help you decide if a personal installment loan is right for you, here are a list of pros and cons.           

            PROS

  • Lower APRs than payday loans
  • Large loans available to qualified borrowers
  • Longer repayment terms
  • May be cheaper than payday loans in some cases

            CONS 

  • Takes a long time to be approved
  • Bankruptcy, foreclosure, auto repossession may prevent getting a loan
  • Personal financial history check required
  • New loan may hurt your credit score 

Payday Loans – Understanding The Basics

Payday loans are somewhat similar to installment loans. However, they are usually issued for small sums of money, and repaid within about 2 weeks – as soon as you get your next paycheck.

Payday loans are usually the best choice when you need quick emergency funds. This is because, due to the low value of each loan, most payday loan companies do not require extensive personal financial history or long payment processing times. 

At Mypaydayloan.com, for example, you can get a payday loan within a single business day – as long as you apply for your loan online and are approved on the same day by 11:40 a.m. EST.

Compared to traditional installment loans online for bad credit, which may take days for approval, this is a big advantage. While the APRs and service fees of payday loans tend to be higher, they’re almost always a better alternative for quick cash, compared to online installment loans.

Here are some pros and cons of payday loans, to help you make your decision.

            PROS

  • Can be approved in just a few minutes
  • Requires no fico credit check
  • Cash is often delivered within 1 business day
  • No impact on credit score

            CONS 

  • Fees and interest are usually higher
  • Shorter repayment terms
  • Lower lending amounts available
  • Missing a payment may result in high fees and surcharges 

If You Need Cash Fast, A Payday Loan Is The Best Choice!

Though installment loans are useful if you have good personal financial history and don’t need money urgently, they are not an ideal way to get emergency cash. If you need money for a personal emergency, you simply won’t be able to get it in time with an installment loan.

But don’t worry! With Mypaydayloan.com, it’s easy to get a payday loan anywhere in the U.S.! Our fully-online lender allows you to complete an application in just a few minutes – and once you’re approved, your funds will be delivered ASAP!

Got more questions? Check out our FAQs and other information about our services at our website or contact our customer service team. Apply today and get the cash you need! 

 

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