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The Difference Between Payday Loans And Installment Loans
Looking for loans as an option to finance something? Well, we understand that is not an easy choice, especially when you are confused as to which to choose: installment loans or payday loans?
Although both of the options are easy to come by and offer great benefits for a borrower, they come with their own risks.
Understanding Installment Loans
These loans can be found through your government banks, private lenders or better yet, a borrower could find online installment loans Texas. These loans are easy and convenient; they are usually offered for small amounts and for a short term.
Furthermore, these loans are given out at a predetermined rate, and a time period for installments is fixed. It could last a year or for ten, depending on your contract and the sum borrowed. And the same stands true for the installment to be paid, which is predetermined as well.
Understanding Payday Loans
Payday loans are also offered for a short term. These loans are given by any lending institute or private lender and are to be paid back after a specific time has elapsed. These short-term loans are favored by those who do not have a perfect credit history.
The amount of such loans is paid in full, after the agreed time period of the contract has elapsed. The rates for such loans are quite high. These loans offer quick cash and hence are a quick solution to all your needs.
Bottom Line- Which to Choose?
Choosing between installment loans, such as the online installment loans Texas and payday loans should depend on only one thing: the propensity to pay back the loan. Payday loans, though easy to get and beneficial to use, are required to be paid back in full. So, only those who can pay it back immediately should go for it. As for installment loans, they are easily handled as they do not need to be paid in a lump sum amount.
In both cases, the interest rate is high. However, the rate for installment loans is comparatively lower than that of payday loans. On another note, one must bear in mind that payday loans are not legal in every state.
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