Depending on the type, an installment loan is one which has a fixed repayment schedule which includes both time and money. A typical installment loan may be one that a consumer takes to purchase a new car, the loan normally is taken out for three, four or five years and the monthly amortization is based on the term of the loan and the amount borrowed to make the purchase.
Long term installment loans have been a way of doing business for many years; in recent years however short term payday installment loans have become available and more popular. A short term payday installment loan is quite different than any other type of loan a consumer might have access to, as well as having differences; they are also marketed to a different group of consumers, in most cases the people who take out any type of short term payday loan have limited resources and nowhere else to turn to in the event they need access to quick cash for an emergency.
Any payday loan is one which is basically an advance on the borrowers next pay check. When the person takes out the loan they are usually asked to leave behind a check for the principal amount plus fees, the check will be cashed when the borrower gets his or her next paycheck and it has been deposited in their account. This works well when the amount is reasonably small, small enough that it can be repaid in full on the due date. In many cases the amount borrowed is in excess of what the borrower can pay in full, enter short term payday installment loans; these types of loans allow the borrower to make multiple smaller payments instead of one single payment which is beyond their ability.
Although both short term and long term installment loans work somewhat similar, a payday loan comes with a high rate of interest, considerably more than what even credit cards charge. The interest rates are high because the lender is taking considerable risk; the lender rarely asks for a credit check and will lend money to those with bad or even no credit.
Like everything else, there is a place for short term payday installment loans. If an individual is going through a rough patch and absolutely needs money there may be no other immediate choice, but, if the loan is not structured properly it can end up costing as much as twice the amount originally borrowed. Those who turn to loans of this nature are simply advised to be cautious, but generally speaking, installment loans are nothing to fear when handled properly.
Short term payday installment loans are often necessary to tide an individual over a rough spot. For full information and rates you are invited to contact us.
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