Deciding between Payday and Installment Loans

Emergencies occur, some of which require immediate cash. Generations past grew up with an emphasis on frugal spending and the importance of saving money. The past two generations have not been as fortunate. The world is a materialistic blend of amazing new products and instant ways of ordering them. Somewhere between the “me” generation in the 1970’s and the “end of the world” warnings that have plagued the new millennium, the practice of saving money has gotten lost.

No Problem!

The internet that brought access to all those “must-have” distractions has also solved the inevitable cash flow situation. People can go online and apply for non-traditional direct lender loans. Upon approval the money is deposited into bank accounts either that same day, or within one or two days. The approval rate is much higher than bank approval rates because eligibility requirements are minimal.

Payday Loans

This popular type of direct loan is the easiest one for which to get approval. As the name suggests, a payday loan is taken out for ten to fourteen days, depending on when applicants receive their next paycheck. The wide appeal is due to the fact that approval is granted for payday loans with no credit check. Since the money will be debited to a bank account, credit rating is not a factor.

In the US, that convenience comes at a higher interest rate than installment or title loans. UK loans from direct lenders will typically have one flat daily interest rate regardless of the type of loan approved. The money is paid back all at once, but the interest rate ends up being less than that of an installment loan that is open for several more days.

Installment Loans

This loan is also fast and convenient. The terms are from two months to six months, with equal payments spread out over the course of the loan. That makes it easier for some people to meet the obligation of paying it back in full and on time. The interest rate does add up daily over that amount of time, which can result in paying back much more than was borrowed.

A loan amount of four-hundred pounds, for example, paid back in four installments as a total cost of five-hundred and ninety-seven pounds. The interest rate adds up to two-hundred and fifty-five point five percent. Most lenders, such as MoneyBoat UK, offer both type of fast cash loans. The decision of which type of loan to apply for is up to the personal preference of the applicant. Go to moneyboat.co.uk for complete details on both loans.

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