05 Jul Installment Loans Vs. Payday Loans
An installment loan is typically between $200 to a couple thousand dollars and is to be repaid within 6 months to 2 years. The initial loan amount plus interest, credit insurance and other fees make up the total cost of installment loans. This type of loan can be renewed and are secured by personal assets.
Payday Loans, by contrast, are lent out for a shorter period of time at a higher rate of interest but are unsecured loans. A payday loan ranges from $200-$2000 and is not based on personal assets. These loans can also be renewed every couple of weeks.
Another difference between an installment loan and payday loan is that a payday loan must be paid in full on the repayment date. An installment loan, as the name suggests, is repaid in installments. Installment loans are also helpful to your credit file. An installment loan is reported to the credit bureau on a monthly basis which can improve your credit.
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