Payday loans vs installment loans

A loan refers to money borrowed by a debtor from a creditor that is to be paid back at an agreed time at an agreed interest rate. There are different types of loans for the borrower to choose from depending on which type suits his financial circumstances best. These loans include car loans, payday loans, personal loans and consolidated loans. Most of these loans are considered installment loans since the borrower pays the lender back in scheduled monthly payments. Borrowers should understand the differences between payday loans and installment loans to know what loan works best to their advantage.

Payday loans

 

 short-term unsecured loan

short-term unsecured loan

A payday installment loan is also referred to as a payday advance. It refers to a short-term unsecured loan that is given to a borrower where he is expected to make payments on his next payday. Payday loans are usually associated with high interest rates as compensation for creditors who face dangers of the borrower defaulting repayments. The creditor cannot perform collection activities if the borrower does not make payment as payday loans are of an unsecured nature. Hence, they do not require you to put up property as collateral.

Payday loans have a simple but expensive application procedure which. It involves you writing a personal check for the amount of money you want to borrow. You are also expected to pay a certain amount of money for borrowing as application fee. Payday loans take a very short time to be processed. Borrowers receive their funds in their checking account electronically, fast enough to meet their immediate financial needs. Lenders of payday loans ask for few verifications which make qualifying for payday loans quite easy. Payday loan lenders require verification of employment or income which is determined through recent paystubs and bank statements. This financial information acts as a guarantee that the borrower is in a position to make repayments.

Online payday loans offer consumers fast application and upon approval the funds are deposited directly into the borrower’s checking account. The repayment procedure involves financial charges being withdrawn electronically on the borrower’s next payday. Payday loans come with certain advantages that appeal to many borrowers.

Advantages of payday loans

 

Payday loans are easy to get

Payday loans are easy to get

1.Easy to get: Payday loans do not involve tiresome procedures and complicated requirements. This makes it easy for borrowers to get a loan. The basic requirements are quite simple and the lender only requires you to have a stable job and a recurring income to qualify.

2. Fast to get: Most payday loans are transferred electronically into the borrower’s checking account. Upon filling out an application form and having your loan approved, you will have the cash you need really fast.

3. Convenience: Payday loans are convenient as they are readily available. Payday loan companies are located throughout most cities. Availability of online payday loans has made it easier for all borrowers to access this loan online.

Disadvantages of payday loans

 

Payday loans can harm your credit score

Payday loans can harm your credit score

1. They are expensive: This is a major reason why most people shy away from payday loans. Interest rates of a payday loan are extremely high which is linked to the risk faced by the creditors if the borrower defaults payment. Application fees are also charged to borrowers which makes borrowing a payday loan expensive.

2. Payday loans can harm your credit score: As payday loans are expensive, borrowers are often burdened by this high cost. So they may delay in making payments which would adversely harm their credit score.

Installment loans

 

Installment loans considered to be less risky

Installment loans considered to be less risky

An installment loan is a type of loan where the principal amount and interest are repaid back in scheduled payments known as installments. Compared to payday loans, installment loans are considered to be cheaper and less risky.

Installment loans are either secured or unsecured, depending on the type of installment loan. Mortgages and car loans are secured where the borrower is expected to put up his house or vehicle as collateral to get the loan. Personal installment loans, on the other hand, are unsecured and their borrowing is based more on the borrower’s creditworthiness and proof of income.

Advantages of Installment loans

 

do not have credit checks

do not have credit checks

1. Fixed interest rates: It is quite distressing when you wake up to hiked interest rates. Some traditional forms of borrowing have varying interest rates which would in the long run, thereby increasing the borrower’s sum of repayment. With fixed interest installment loans, your payments remain the same since its interest rates are fixed right from the beginning. You know exactly how much to pay every month. With this knowledge, you can budget your finances carefully so that you can make repayments promptly every month.

2. Longer terms: Long term installment loans can be as long as 30 years. During this period, the borrower can spread out their repayments over the loan term at his or her convenience. This makes installment loans more flexible than other short-term loans.

3. Easy and fast to acquire: Once you have applied for an installment loan and it is approved, you can get the money when the lender deposits the funds directly into your checking or saving account. Qualifying for an installment loan is very simple. The borrower has to meet the minimal age requirements of 18 years and older. You should also have a recurring income source. You must also provide a valid checking or savings account where you can receive your funds.

4. No credit checks: Some installment loans do not check the borrower’s credit score. Borrowers with bad credit or no credit can borrow payday installment loans.

Installment loans disadvantages

 

Risk of losing property

Risk of losing property

1. High Interest rates: Due to the fact that interest rates for installment loans are fixed, some lending companies may take that opportunity to charge outrageous rates. This would adversely increase your loan repayment amount. With the help of an installment loan calculator, you may avoid this pitfall. The installment loan calculator estimates for you the monthly payments and interest rates you are required to pay for the type of loan you choose.

2. Risk of losing property: There are installment loans that require borrowers to put up a collateral in order to secure a loan. In the event that he delays repayment, the creditor has the legal right to call for collection activities. In the long run, the borrower could lose his collateral.

Differences between payday loans and installment loans

 

Difference B/w payday & installment loans

Difference B/w payday & installment loans

Both payday and installment loans are associated with high interests and they can be easily available without subjecting the borrower to any credit checks. Despite their similarities, they also have their differences.

1. Payday loans are unsecured while installment loans can be both secured and unsecured depending on the loan type.

2. Payday loans are short-term loans that should be repaid on the borrower’s next payday. Installment loans provide longer term borrowing of up to 30 years.

3. Payday loans are paid using a post-dated check. For installment loans, lending companies electronically withdrawn or the borrower pay using a check every month.

4.  Payday loans have extremely hefty interest rates that may be as much as 390% whereas an Installment loan can only go up to about 90%.

How to choose the best loan for yourself

 

There are certain things you should consider before deciding on the type of loan to use. These include:


Interest rates

 

choose loan with lower interest rate

choose loan with lower interest rate

It is imperative that you choose the type of loan with a lower interest rate. This is because with a higher interest rate, you may end up paying much more in the long run which may force you to take out another loan to repay the former one. Installment loans have considerably lower interest rates compared to payday loans.

Effect on your credit score

 

Both types of loans may have a negative effect on your credit score if you delay in making payments or in the event that you default. However, making your installments on time every month can help repair your bad credit score. Payday loans, on the other hand, do not improve your credit score.

Repayment preferences

 

Payday loans are short-term loans. This means they have faster maturity dates and you are expected to repay the loan within a short time, usually by your next payday. Long-term installment loans can take up to 15 years, hence allowing you to plan manageable repayment schedules. This makes installment loans more flexible compared to any other forms of short- term loans. Get an installment loans calculator and see what you are missing on!

How to save money with loan consolidation

Debt is not new topic for most people. It has helped some people through difficult times. However, debts have also trapped some people in a vicious cycle. Debts should be managed carefully. They are headaches to deal with and it is worse if you have more than one debt to repay.

Debts come in all forms, from car title loans, payday loans, student loans, credit card loans, cash advances and the list goes on. All In all these have to be paid back in full. This is where problems happen. With the high interest rates on these types of loans, you will be spending a lot of money on loan repayment.  

With debt consolidation loans, you have a chance to reduce the amount of money paid. Consolidated loans work in such a way that the lender grants you a loan to repay all the debts that you may have, then you are left to slowly repaying that loan back slowly.

How can loan consolidation help?

 

  1.     Lower interest rates
How can loan consolidation help?

How can loan consolidation help?

Typical loans have quite high interest rates. Interest rates are even higher in loans such as  payday loans and car title loans. These loans typically have annual percentage rates ranging from between 250%-450%. This translates to between 20% and 38% of the loan amount. If you have more than one loan with such high interest rates, you are definitely going to feel the pressure.
Loan consolidation could help to solve these issues. It gives you the chance to get out of all these debts, and gives you a reasonable interest rate that matches your monthly income. In doing so, you save a lot of money on interest rate.

Every borrower dreads the inability to repay a loan due to rising interest rates. A consolidation plan keeps you out of such situations. All it requires from you is to do the math and make sure that the consolidation plan works for you and not against you.

  1.     Roll overs and payday cycle
 the ultimate way out of debt

the ultimate way out of debt

Assuming you took two or more payday loans. Now you know that when it come to payday loans, you have to make the payments in a lump sum all at once. However, you may be facing hard times and you are forced to apply for a postponement of repayment. This leads to the rollover situation which involves pushing the repayments to the next month. The lender may also subsequently review your interest rates and add other fees and penalties. If roll overs are done frequently, your debt grows and you may fall into a payday cycle scenario which you have to keep coughing up money every month to servicing loans that seem never ending. This is where you need to consolidate loans

For this reason, consolidation loans have become the ultimate way out of debt and at the same time save a large sum of money. The consolidation loan lets you clear up the debts that you have and help you avoid the lethal payday cycle. You have just a specific amount of money as to pay each month, for a specific time until you can repay back the loan.

  1.     The “good credit” factor

Financial decisions are and should always lean into the future of the individual in question. By saying this I mean you have to make a decision that ensures that your future is guaranteed to be easier that the situation you are presently. Look at it this way, you may require to take up an unsecured loan. Depending on your credit score, the interest rates will lean in that direction. If bad, then the interests will be high, but if it’s good, the interests will be lower.

Debt consolidation helps you build up a good credit score. This is because it moves you away from the numerous monthly payments that you are prone to skipping or forgetting. You now have just one monthly payment to focus on. When you follow up all repayments on time, you get to improve your credit score. This may mean you have a brighter financial future. With a good credit score, you can get a traditional bank loan with affordable interest rates. You have less to pay when it comes to loans in the future, thus saving you money. A debt consolidation loan is a great money saver for most people who know how to get the best out of it. Bad Credit Consolidation loans are also available with few lending institutions

The basics of car title loans

Need fast cash?

Need fast cash?

Every person would love the idea of receiving fast cash when  they need it. More often than not, they meet with some obstructions along the way. Having a bad credit score is a huge disadvantage when it comes to borrowing bank loans. Luckily, there  are some types of loans which do not take into account credit scores at all.

Car title loans are one type of such loans. A car title loan is a secured loan that allows borrowers to use their cars as collateral.

The lending company determines your car’s price based on the worth of the car in relation to the price that it would cost in the auction market. The lending company holds your car’s title until you pay off the whole loan within the stipulated time frame.

In the event that you default on your repayment, the lender is allowed to repossess your car and sell it to recover outstanding debts. However, if the borrower repays the loan on time, the lender will return the car’s title back to you. 

Car title loans are generally short-term loans and are associated with higher interest rates than other types of loans. The high-interest rates act as a guarantee for lenders as they cover the risk of lending to borrowers who are already in financial difficulties. In loans such as car title loans, the borrower’s credit history is not the lender’s concern. The value and condition of the car that is being used as collateral are of utmost importance. Hence, it is possible for borrowers with bad credit to secure a loan.

  • Eligibility of car title loans

Eligibility of car title loans

Eligibility of car title loans

1. Proof of your income


To secure a car title loan, you are expected to show your payslip and other necessary evidence of a regular income. As car title loans are associated with hefty interest rates, the lending company expects you to have a regular income so that you can fund the repayments.

2. Minimum age


You must be 18 years and older for you to secure a car title loan.

3. Personal identification


To secure a car title loan, you are required to have certain forms of valid identification These include a driver’s license, car registration number, and car insurance.

4. Proof of residency


You are also expected to give proof that you live in the said state. To prove this, you can provide some form of relevant mail.

  • Car title loans online

Car title loans online

Car title loans online

Many title loan companies offer online application for title loans. This application requires you to give basic information. Such information include:

1. Personal information


This includes your name, address, and contact telephone numbers.

2. Vehicle information


This includes the make, mileage, color and vehicle identification number.

3. Insurance information


You may need to reveal your insurance policy numbers or increase the coverage amount while taking up a car title loan.

  • Loan calculator

The amount of loan that you can secure is dependent on the worth of your vehicle. The lender generally offers a loan that is about 30% of the vehicle’s worth. This guarantees the lender of good profit in the event that they repossess the vehicle and sell it at an auction if you were to default on repayments.

  • Why car title loans are good borrowing options

No credit checks

No credit checks

Most borrowers take out car title loans due to their benefits.

1. Fast approval


With car title loans, you can get your money in just a few days or in a matter of hours. The money is either sent to your bank account or you can receive a check.

2. No credit checks


Many people who struggle with a poor credit score. With car title loan, lenders are not concerned with your credit score. Instead, the value and condition of the vehicle that is put up as collateral are very important to them.

3. You get to keep your car


With car title loans, you get the loan while still getting to keep your car. The only thing that the lender requires is that you give them a set of the car keys and its title until the loan is fully repaid.

4. Easy to qualify for


Title loans are very easy to secure. There are only a few requirements that should be met for you to be eligible. These are proof of income and residency, meet the minimum age and own a vehicle.

5. Less paperwork


Car title loans are available online. This minimizes tedious paperwork.

  • Disadvantages of car title loans

 Danger of losing your car

Danger of losing your car

1. Higher interest rates


Car title loans come with unreasonably huge interest rates. Interest rates may even exceed up to 300% at certain times.

2. Payment and fees


Lenders of title loans frequently charge outrageous fees and interest rates which end up leaving you even more in debt.

3. Danger of losing your car  

   
Car title loans are secured with your vehicle as collateral. In the event that you default in repayment, the lender has the right to repossess your vehicle and sell it.

  • Car title lenders

things you should consider

things you should consider

Most people are susceptible to fraud from rogue lenders and companies. Before committing to a car title loan, there are certain things you should consider.

1. You should apply for car title loans during emergency financial situations only.

2. Always borrow the smallest amount possible to avoid burdening yourself with unnecessary debt that would land you in more financial difficulty.

3. Many lenders are out to charge outrageous interest rates. Before committing to a car title loan, make sure you negotiate for the lowest possible interest rate.

4. Look for a lender that has won high approval ratings from customers over time.

  • Alternatives to car title loans

It is of utmost importance for any person who wants to take out a loan to evaluate what other alternatives are available. Compare the interest rates, penalties, fees and other options before making a decision.

1. Payday loans


Although payday loans also come with high interests, you do not stand the risk of losing your car in case of loan  default or late repayment.

2. Personal loans


Personal loans have a fixed number of months which you have to pay back your loans. With this, you can easily come up with a repayment plan. Personal loans come with interest rates that are lower than those of car title loans.

3. Sell your valuables (pawning)


If you are in dire need of fast cash, you can consider pawning some of your valuables such as jewelry. You can sell these items on online platforms such as eBay and Amazon.

4. Emergency loans 

       
These are short-term unsecured loans that come with low-interest rates. Emergency loans can be offered by companies with an emergency loan program for employees making the borrowing experience cheaper and easier.

Can you get out of debt with a payday loan?

When you are in debt, it’s sometimes important for you to take care of it immediately. You may be willing to take up another debt by taking out another loan just so you can deal with the current debt. If having instant cash is what you need, then payday loans might be the thing for you, though using a payday loan to get out of current debts might get you into even more trouble.

  • What is a payday loan?

Payday loans are monetary loans

Payday loans are monetary loans

Payday loans are monetary loans provided to borrowers that must be paid in full when the borrowers receive their next paychecks. The loan amounts granted are typically small and are based on how the borrower’s salary.

Taking out a payday loan is certainly one of the fastest and best ways to get instant cash. No matter what your emergency is, applying for a payday loan will get you the needed money in no time. Since the service is really fast and easy to get approval for ( bad credit is almost never an issue as you can take out a bad credit payday loan just as easily), payday loans have very high interest rates which are higher than conventional bank loans. This is because of the risk that payday lenders take by not seeking collateral from borrowers, lending money to applicants with bad credit history and only asking for basic personal information. With payday loans, the borrower usually borrows an amount of money that he can repay on his next payday. Being late in repayment is not a good idea as that will incur heavy penalties.

  • How much can you borrow?

Usually up to $1,000, though some lending companies restrict the size of the first loan they offer. Loan tenures could be less than a week or months occasionally. There are usually no early repayment charges, but there are fees for setting up the loan as well as interest which is usually calculated daily.

  • So, can you get out of debt with a payday loan?

The answer is yes. However, there is another important question you have to ask yourself and that is, should you get a payday loan to fix your debt?  The answer for that question is entirely dependent on your situation. If you are very sure that you can repay that loan on your next pay day, then go for it. However, if there is even a hint of doubt, or you are just hoping that things just might somehow come together in a way that you’ll be able to repay the debt, it’s best that you look for other options.

What Are Installment Loans?

Loans have consciously and unconsciously seeped into our-modern day spending – from big-ticket ones like mortgages and home equity loans to short-term loans like payday loans and revolving loans with the use of credit cards. Loans have made it possible to purchase items that people couldn’t otherwise pay for in cold hard cash. Borrowing money from the federal government, banks, and third-party lenders locks borrowers into an agreement of a scheduled pay-off plan. The payment schedule varies widely depending on the type of the loan. Payday loans typically need to be paid off in full in at least two weeks’ time while mortgages can be paid in 5 to 40 year terms with fixed monthly payments.

An installment loan offers qualified customers access to larger loan amounts, a longer repayment period, and a more personalized repayment schedule than a payday loan.  Although, they are similar to payday loans installment loans give borrowers more repayment options and flexibility than with payday loans.  Installment loans provide a borrower with an opportunity to choose a repayment schedule and to customize payments that are stretched out over a period of time in a series of installments rather than a single lump sum.  This is most helpful for borrowers who can’t afford to use a large portion of their earnings in one fail swoop to pay back a one time loan.

What Is The Difference Between A Payday Loan And An Installment Loan?

An average payday loan ranges from $300 to $500 and is typically repaid on the borrower’s next payday via electronic funds transfer or post dated check.  The average installment loan ranges from approximately $200 to sometimes thousands of dollars. The largest differences between a payday loan and an installment loan is that installment loans are typically paid back on a monthly basis over an extended period of time with the loan and interest put into a sequence of monthly payments

Why An Installment Loan Instead Of A Payday Loan? 

Borrowers should consider an installment loan instead of a payday loan for larger expenses and lower interest rates. Installment loans are great for purchasing more expensive items or services such as building and home repairs, automobile maintenance and repairs, unexpected educational expenses such as the need for a new computer or printer, and unexpected emergency medical needs. Payday loans are more suitable for less expensive items such as groceries, small unexpected non recurring bills, clothing for work when there has been a sudden change in dress code in between paydays, or unexpected travel expenses for work or family emergencies.

All Installment Loans Have Commonalities

  •  Long-Term

Installment loans are usually repaid in monthly installments over a period of approximately six months.  Unlike a payday loan, which is usually due on or around the borrower’s next payday and repaid in a single payment,installment loans are paid in multiple payments.

  • Personalized Repayment Plans

Lenders of installment loans are typically more flexible with repayment terms than are payday lenders because the loan is designed to cover a longer period of time than a payday loan. The longer repayment time of an installment loan allows the lender to work more closely with the borrowers to develop a repayment schedule that is customized to be budget friendly for the borrower.

  • Online installment loan Applications

In this day and age applying for an installment loan is easier than ever because borrowers don’t have to leave the comfort of their homes, aren’t restricted by the office hours of a brick and mortar building, and have endless possibilities to find a company that best fits their needs online.

  • Can Be A Secured or Unsecured Loan

Secured Loans

 

Secured-LoanSecured loans are loans that are protected by an asset or collateral of some sort meaning that the item purchased is used as collateral. The lender holds the deed or title until the loan has been paid in full, including interest and all applicable fees. Secured loans are usually the only way to obtain large amounts of money because it provides some assurance that the money will be repaid according to the agreed upon terms.  Putting a borrower’s home or other property on the line is a safe guarantee that he will do everything in his power to repay the loan.   Secured loans usually offer lower rates, higher borrowing limits and longer repayment terms than unsecured loans.  As the term implies, a secured loan means the borrower is providing “security” that his loan will be repaid according to the agreed terms and conditions. It’s important to remember, if the borrower is unable to repay a secured loan, the lender has the authority to foreclose or repossess the item used for collateral and sell it to pay off the balance of the loan.

Unsecured Loans


With an unsecured loan borrowers don’t need collateral to be approved for the loan. Collateral is something valuable in the borrower’s possession such as an automobile title that will stand good for the debt in the event the borrower fails to repay the loan so the lender can regain some or all of their money. Unsecured lending is riskier for a lender than secured lending so the amounts loaned are typically lower and have a slightly higher interest rate.

  • Relatively Larger

Because they can be long-term and secured, installment are usually for larger amounts than payday loans because it may be possible for lenders to recover some lost resources.

  • Typical Borrowers Must:

     

    • Be at least 25 years old or older
    • Meet citizenship requirements
    • Have a valid bank account that can receive direct deposits
    • Have a verifiable minimum monthly income of $1300
    • Have proof of employment such as a recent pay stub
  • Installment Loan Pros

     

    • Repayments are set up in advance so a borrower is aware of the amount he will be repaying along with a fixed interest rate.
    • Payments remain the same so the borrower is able to calculate the payment into his budget.
    • Longer and lower payments compared to payday loans means the borrower can pay back the loan over a longer period of time rather than his next payday.
    • Reasonably quick to set up with a short process time.
    • Funds can be transferred within a few days of successfully completed and approved application.
  • Installment Loan Cons

     

    • Payments are higher than traditional loans but not as high as a payday loan.
    • Missed payments and/or deadlines can result in late fees and extra charges that increase the cost of the loan and negate the pro to the installment loan.
    • In some cases installment loans may be secured by an asset and failure to pay them can result in seizure of the asset in order to pay off the debt.

Loan Compatibility

When a borrower is trying to decide what type of loan is most compatible for his needs he must first determine how much he needs to borrow and for how long. Does the borrower want something that is quick and short term such as 1 or 2 weeks or does he need smaller payment that can be extended over a few months? Obviously larger amounts over longer periods of time would be more manageable as an installment loan rather than a payday loan that would need to be repaid within a few short weeks and possibly reek havoc on a tight budget.

Qualifying for Installment Loans Online

Applying for an installment loan is similar to applying for any other loan.  An applicant must meet the criteria set by the lender in order to be approved and most are surprised by the simplicity of the process. The basic criteria for a potential borrower is he must be at least 25 years old, have a valid bank account capable of receiving direct deposits, have a minimum monthly income of $1300, and proof of employment. Although some lenders may look at a potential borrower’s credit rating this is usually not the determining factor for approval for some lenders. Borrower’s are approved for installment loans every day that have poor credit, no credit, and even a bankruptcy on their credit history and/or report.

Repayment Terms for Online Installment Loans

Repayment terms will depend on the policies of the lender; however, they are normally drawn up and an agreement made prior to funds being transferred to a borrower’s checking account.  Most lenders want a repayment schedule that works with a borrower’s budget so repayment terms usually range between 14 and 18 months. With an installment loan interest accrues the same as it does on a mortgage or automobile loan based on the amount of money that is borrowed.  Unlike some mortgage or automobile loans most installment loan lenders don’t penalize the borrower for an early pay off giving the borrower more control over how much he pays in fees.  In other words, paying an installment loan off early would enable the borrower to pay fewer fees.online installment-loans

About Us

GAD Capital is committed to providing hard working people with a quick and easy short term solution to unexpected expenses. Customer satisfaction is our goal, if you’re drowning with bills and need to take action TODAY count on www.GADCapital.com for your Short Term Loan needs. Get the attention and service you DESERVE, give us a call today 1-877-403-3392.  Our services stand above that of others because we strive to match you with services that not only work for you but services that you will be happy with and will recommend to friends and family who find themselves in need also.

At GAD Capital we aren’t a lender nor are we part of setting the terms of the loans instead we strive to find suitable lenders for potential borrowers by screening them to ensure that they meet the requirements of the lenders within our network.  GAD Capital is simply a bridge that connects a borrower to lenders.  The terms of the installment loan such as interest rate, loan amount, associated fees, and repayment schedule are determined by the lender and borrower. Each lender has their own approval criteria so it would be impossible to list all of the required qualifications of all the lenders within the network that GAD Capital provides screening for. However, in most cases having a poor credit score does not disqualify someone from being eligible for an installment loan and the lenders who partner with GAD Capital aim to provide loans to individuals who do not have perfect credit.

Applying for your personal installment loan is easy through GAD Capital’s online application. Because GAD Capital is a screening agency rather than a lender we have more resources than the traditional brick-and-mortar lenders that offer installment loans.  In order to have the same options and access to lenders potential borrowers would have to go to several different loan offices, which would mean taking off numerous hours from work and lost wages in order to meet with all of the available lenders during the lender’s business hours. At GAD Capital we supply borrowers with potential lenders on the borrower’s schedule instead of the lenders schedule eliminating the potential for the borrower to jeopardize his employment.