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
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 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.
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.
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.
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.
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.