Bad Credit Installment Loans Vs. Payday Loans
Bad credit installment loans unsecured are basically the same as a payday loan. They are both short-term loan solutions with a few key differences:
In both cases there is usually no credit check, and you can receive the full amount of your loan right upfront. The key difference is that bad credit installment loans can be stretched out for a longer period of time — as opposed to a payday loan which is usually due in 2 weeks, or on your next payday.
And if you fail to pay off your payday loan IN FULL at the time it’s due, in essence you’re taking out a brand new loan to pay off the old one, starting the loan cycle all over again. This causes more interest & fees.
But with installment loans, these type of loans can be stretched out typically up to 3 months or more before they’re due in full. A no credit check installment loan will usually end up cheaper than payday loan.
Also installment loans are scheduled with fixed monthly payments that is steady over the course of your loan. You will not have to guess how much your payments will be every month, which makes these loans more stress free.
Another difference is that there is generally no prepayment penalty with an installment loan, so if you want to pay off your loan early you can do so without penalty or additional charges. You are only charged interest prorated up to the exact amount of days that you keep your loan; nothing more nothing less.
Depending on the laws of your state, some payday loan companies will offer you an option to take out an installment loan instead of a regular payday loan. Be advised that this arrangement is not always available in every state. The great about it is that in this day & age you can apply conveniently online for both of these short-term loan solutions.
All-in-all, a traditional bad credit installment loans unsecured are better for your more extended financial needs.
Take a moment and think about your situation carefully and choose the best option that matches your financial needs.