finances

Why Should You Choose an Installment Loan over a Payday Loan

Trying to secure a loan with bad credit can be an uphill task. You find yourself in a situation where your options are limited, and the trade-off is not that great. As you look for bad credit personal loans, you may come across a whole range of questionable offers too. But it’s important to make wise choices even when you’re in financial straits.

One of the easiest options here is to go for a payday loan. However, you’ll find that you’re much better off with an installment loan. They give you more flexibility, wider options, and a much more beneficial deal in the long run. So, what are installment loans, anyway?

Installment Loans: What are they?

An installment loan is virtually a loan that you can repay over multiple payments within the agreed-upon period. It usually means making monthly payments until you pay back the amount due. The time period can range between a few months up to several years. Installment loans can involve amounts as high as $40,000. But it’s more common to see people go for amounts from $1,000 – $10,000.

Why go for an Installment Loan?

Now that we know what installment loans are, we can understand why they count as a better alternative to other bad credit personal loans.

·  Loan amounts are higher than other alternatives. Installment loans typically come for $2000 or $5000. But you’ll also find amounts that go upwards of $10,000 and beyond.

·  They have repayment periods that are much longer than other loans. While some arrangements last for a few months, others can give you several years to repay.

·  They have lower monthly payments, especially if you go for a longer term. It means you don’t feel the pinch as much as you would on other short-term plans.

As the year 2020 rounds up, there’s increasing evidence that installment loans are becoming even more popular. Bad credit personal loans usually come with rigid regulations that can harm more than they help. With installment loans, we see that they offer a dynamic set of benefits that you don’t find in other loans.

The benefits mentioned here work in most installment loans. So, even if you measure them against a payday loan, for example, you’ll find the advantages still stand. But installment loans can be better than payday loans in some other ways too.

Why choose an Installment Loan over a Payday Loan?

Payday loans can seem like a good choice when you’re in need of some quick cash without hassles. But borrowers often forget that the lump-sum you have to pay on your next paycheck really burns a hole in your wallet/purse. The inability to pay this amount often leads to more borrowings, and the dreaded cycle of debt begins. 

Here are some of the practical benefits of installment loans over payday loans.

·  Installment loans do not require lump-sum repayment. You can clear the dues through conveniently scheduled payments.

·  While payday loans come around immediately on your next paycheck, installments loans give you time and control. You can get installment loans that can last for a few months or several years too.

·  In most cases, the overall interest and fees you pay may be proportionately lower with installment loans.

·  Installment loans do not require any collateral because they’re usually unsecured loans.

·  You can also apply for a same-day deposit. Just make sure your documents and requirements are all in order.

Conclusion

Bad credit personal loans all seem great at first glance. But on closer inspection, you may find that a lot of them have conditions and exorbitant fees that take away any apparent benefit. 

Installment loans are convenient, easy to understand, and borrower-friendly in many ways. If you’re in a financial pickle, consider an installment loan over other bad credit personal loans today!