Payday loans and personal installment loans are 2 popular types of lending options for consumers these days. So what's the difference between the two options and which one is better?
This really depends on a lot of different factors and what the consumer is trying to achieve. Each option has its pros and cons. It's important to understand the benefits of each and how they compare to make an intelligent decision for which option to use in a particular case.
In short, payday loans offer smaller amounts with higher interest rates but they are much easier to qualify for because lenders don't check credit history. So this might be the better option for someone with bad or no credit. Applicants do however still need to have an income source because that's a guarantee the lender uses to know that the loan will be paid back. Payday loans are also issued for a short period of time, usually until the next payday of the customer.
On the other hand, a personal installment loan is a more traditional credit based loan. This option will almost always have better (lower) interest rates than payday loans and usually is issued for longer periods of time. But, of course, it does require credit to qualify for it.