There is a lot of confusion and illiteracy about the different loans available in the society. Even some college graduates have only a little knowledge about the loan. They can’t differentiate between a payday loan and installment loan. The people in Bastrop, la is not an exception to this.
Here are some of the key points to consider before applying for a loan:
- Period of payment.
- Renewal of the agreement.
- Percentage of interest.
- Security statement.
- Amount lent.
Period of payment: –
First and foremost, difference between the loan is the period of returns. In a payday loan, the returns should be within a short-term which usually won’t exclude a month. Whereas with the installment loan it will vary from few months to years depending on the bank statement.
Renewal of the agreement: –
When it comes to the payday loan, there is no renewal of agreement but with the installment loan, the agreement can be renewed even after few months but with new interest rate and fee.
Percentage of interest: –
When compared to the installment loan payday loan offers a higher percentage of interest. The Percentage may vary from place to place. In Bastrop, la the payday loan is quite lower when compared with other places.
Security statement: –
When it comes to the installment loan, the security deposit is must which may in the form of collateral. Whereas in a payday loan bank statement alone is enough to receive the payment.
Amount lent: –
Finally, the amount lent by the payday loan will be from few hundred dollars to a thousand. But with the installment loan, the amount lent will be up to several thousand dollars. This is one of the main reason for the long-term payment mode with the installment loan.
Advantages of payday loan: –
Some of the major advantages of going to payday loans will be:
- It is faster than an installment loan.
- Best suitable for the family crisis or in an emergency situation.
- Most of the payday loans don’t require a credit check which is a huge relief to a lot of people.
Advantages of installment loan: –
Some of the advantages include:
- The long-term payment makes the returns lower than the payday loans.
- The fixed rate of the interest makes the most predictable yet low monthly payments.
- The monthly payment will be flexible to the borrower but at a cost.
- They are a bit safer and secure compared to the other loans.