With the changing times and technology, there are various types of loans available to borrowers. These loans are classified into two main categories:

• Installment Loans
• Payday Loan

Understanding the difference between installment loan and payday loan is crucial since it will help borrowers determine the best loans for their needs.

Payday Loan: short term loans up to $1,000 (minimum requirements)!

These loans are given out by credit agencies that are available globally. Payday loans can also be accessed online. This type of loan requires no collateral but has high interest rate compared to other types. Your next paycheck acts as security for the loan.

Characteristics of payday loans

• The borrowable amount ranges between $100 and $1,000
• The loan should be paid in full, in less than 30 days

Benefits of Payday Loans

• Minimum requirements!

• Very easy to acquire – this loan does not require a lot of paperwork and formalities. You only have to show your most recent paycheck to receive a payday loan.

• Very fast – the payday loan takes a few minutes to be approved.

• Convenient – payday loan agencies are easily accessible. You can borrow online or walk into a payday loan bureau near you.

• Convenient loan option - payday loans lenders have very lenient terms and may provide credit when other options are unavailable.

Disadvantages of payday loans

• High-interest rates – payday loans are expensive form of credit. The lenders charge high interest rates.

• High chances of falling prey to scammers – there are many fraud lenders out there pretending to be legitimate. Ensure that the lender is qualified and operates within the law before taking out a loan.

• A tendency of becoming cyclical – using your paycheck to pay a payday loan can set you back, forcing you to take another payday loan as soon as you pay the already existing one. With high interest rates, this cycle can be costly, creating an even bigger debt hole with every transaction.

Where can you get a payday loan?

• Check cashing stores
• Cash advance lenders
• Short term lenders
• Payday lenders
• Online

or find offline store (office) near you

Installment Loan: medium term loans (3-6-9-12-24 month) up to $3,000!

Personal Loans - Up to 12-24 months cash advance!

An installment loan is a short-term, secured loan that is extended to borrowers. Compared to the payday loans, its interest rates are relatively lower. This loan is paid within a predetermined period in manageable installments. Installment loans include mortgages, car loans, consolidated loans and personal loans among others.

Characteristics of Installment Loans

• You can borrow anywhere between $1,000 and $3,000
• The loan can be paid off in installments over a period of between 3 to 24 months

Advantages of installment loans

• Predictable payment – you get to work with your lender to ensure that your monthly payments are reasonable and manageable.

• Longer terms – you can spread your loan up to 60 months which make the monthly payment manageable.

• Straightforward and fast – with proper documentation, you can get funding in less than 24 hours.

Disadvantages of installment loans

• Penalties for missed payment
• Security and collateral

Where can you get an installment loan?

• Banks
• Peer-to-peer lenders
• Credit unions
• Auto loan lenders
• Online

or find offline store (office) near you