If you have ever found yourself strapped for cash a few days before payday then you have probably wished you had some sort of line of credit. It can be hard for people to build credit in the first place, since people don’t want to lend you anything without seeing prior proof of credit having been repaid. Not all institutions are so picky though! This is where instalment loans come into play.
Instalment loans are a great option for those who have little to no credit who may need access to money in a pinch. Whether it is for groceries, a car repair, a medical bill or whatever else may come up, an instalment loan could be the best way to go if you need cash quickly.
How Instalment Loans Differ From Payday Loans
Unlike a payday loan, an instalment loan allows you to borrow a larger sum of money in a single sitting as well as giving you a longer time period to pay it back. Instead of having the full amount due on your next payday it may be broken up into a few smaller and more manageable payments for a large amount.
One of the biggest problems with payday loans has been the ease of falling into a cycle of borrowing and repaying, because you have to use a full pay cheque sometimes to pay back that money. Now with instalment loans you have a chance to pay it back over time.
Is There Advantages of an Instalment Loan
Just like payday loans, instalment loans are meant to help people with little to no credit. This allows people who would normally be stuck in a situation until payday, to be able to pay for emergency needs. One of the biggest advantages of an instalment loan is the ability to get a larger amount with a longer time to repay than a traditional payday loan.
This is a great advantage for those who may be living in a payday to payday situation. This allows them to not have to lose an entire cheque to take care of a large expense. This option is especially great for those who are having trouble with their credit or who cannot get any in the first place.
Does it Cost More than a Payday Loan
No, it is about the same as a payday loan. The rates are a little higher as the customers are usually a slightly higher risk. But using an instalment loan is easier on your pockets than a traditional payday loan that may be difficult to pay back in one shot. When you are looking for a short-term loan, this is one of the best routes you can take if you do not have access to a regular line of credit through a bank or other financial institution.
Instalment loans are a great development in the lending mark. With this new ability to pay over a longer period of time, more people will be able to get the money they need when they need it.