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You are probably familiar with the concept of a personal loan. Personal loans are a type of credit that you can access to help with making purchases (like a new car or to help pay medical bills). You can also use a personal loan to consolidate other bills
with high-interest rates as they generally have lower interest rates than credit cards.
Two of the more common types of personal loans that you'll come across are payday loans and installment loans. But what are the differences between these loans? What are the pros and cons, and which one is better?
Learn all of this and more about the differences between payday vs installment loans, below.
An installment loan is a type of loan for a set amount that can include anything from a mortgage to car to more personal loans from banks. Installment loans
are usually longer term (like 30 years for a house and six years for a car) and require payments made in installments of a set amount of money paid at a set time (usually once a month). These usually require a credit check to get an installment loan.
Typically, a payday loan is not an installment loan – rather it’s a single-term loan with shorter payment terms and higher interest rates. They are typically for $1,000 or less and due back in about a week or two (or your next "payday"). Payday loans do not require a credit check.
Is an installment loan right for you? Let's take a look at the pros:
There are very few cons to taking out an installment loan, but you should consider:
Payday loans may seem like a great quick fix, but they have very few pros:
Consider the following cons before taking out a payday loan:
So now that you've learned all about installment loans vs payday loans, which is right for you?
While there's no credit check and very few requirements for taking out payday loans, these should be seen as red flags instead of good things. Yes, they're very easy to get, but also very easy to get sucked into a cycle of getting "quick cash" that snowballs into a financial situation that's very hard to get out of.
Only take out a payday loan if you are 100% sure you can pay it in full, on time. Otherwise, consider other options like installment loans.
Installment loans are a great loan option because you can borrow money and pay it back over time, instead of right away. Applying for installment loans from Check `n Go is a simple and secure process. You can see the money you need deposited directly into your bank account as soon as the next business day. Plus, you can choose the payback terms that best fit your lifestyle and budget.
Are you ready to apply for an installment loan and start working toward financial peace of mind?*
The main difference between payday loans and installment loans is that typically, payday loans have a much shorter payment term and higher relative finance charges
It’s important to know the difference between installment loans and payday loans because one or both may not be the right fit for you at any given time. To see the types of loans offered in your area and find out which one of our services is the
best fit for you, visit our Rates and Terms page, or visit or call the retail store nearest you.
With payday loans, you don’t need to give us any collateral. Payday loans are considered a form of unsecured debt. Therefore, they are typically accompanied with higher interest rates compared to other types of installment loans.