Yusra3
VIP Contributor
If you're in need of quick cash, you may be weighing payday loans against installment loans. However, the two couldn't be more different in terms of cost and risk to the borrower.
Payday loans are small, short-term loans that typically must be repaid in a single lump sum on your next payday. The fees equal shockingly high APRs of 400% or more. Miss that payoff date and you'll continue racking up even higher fees. It's extremely easy to get trapped in a vicious payday loan debt cycle.
Installment loans, on the other hand, allow you to borrow more money for a longer period of time - generally up to a few years. The loan is repaid in affordable monthly installments at a much lower APR, usually 15-35%. They're a safer, more manageable way to borrow money without getting caught in triple-digit interest debt traps.
For those needing quick access to cash, installment loans are by far the better option over payday loans. The lower rates and longer terms provide a more affordable path out of debt.
Payday loans are small, short-term loans that typically must be repaid in a single lump sum on your next payday. The fees equal shockingly high APRs of 400% or more. Miss that payoff date and you'll continue racking up even higher fees. It's extremely easy to get trapped in a vicious payday loan debt cycle.
Installment loans, on the other hand, allow you to borrow more money for a longer period of time - generally up to a few years. The loan is repaid in affordable monthly installments at a much lower APR, usually 15-35%. They're a safer, more manageable way to borrow money without getting caught in triple-digit interest debt traps.
For those needing quick access to cash, installment loans are by far the better option over payday loans. The lower rates and longer terms provide a more affordable path out of debt.
