Although the available amounts of online loans are still growing, and in recent years, even in payday loans, you can count on several thousand dollars (see the article ” The largest amounts of free payday loans”), loans most often taken out by customers are based on medium and small amounts. Of course, it is a great comfort to be aware that in the case of a “fatter” need, such amounts will be easily achieved, but most often, however, an urgent need is not an excessive cost.
Wanting to borrow 1000 dollars, many of the borrowers will direct their first steps towards payday loans, although it would also be good to think about an installment loan, which, after all, can be taken in an easy, simple way – via the Internet, without formalities and certificates, and in 15 minutes.
Installment loans in small amounts – advantages and disadvantages
Before choosing an installment loan as an alternative to a standard payday loan, consider all the pros and cons. However, it is not possible to indicate the superiority of one loan over another and clearly state which is more profitable, because the final decision will always be on the borrower’s side and which loan his budget can bear without too much harm.
Installment loans have their undoubted advantages, even those in small amounts. First of all, the loan repayment is spread over several small amounts (especially when we borrow only USD 1,000), and therefore it will not be as noticeable or severe.
If we decide on payday pay, we must be aware that the entire amount must be repaid usually in a month, while an installment loan can, depending on the company, be given in 3, 6 or even 12 monthly installments. In addition, a small amount spread over several or several installments is also a smaller burden on creditworthiness – unlike the payday payday. This is good because if you need it (and we know that sudden expenses like to entail further sudden expenses) there will be no problem with taking another loan.
Although it should be remembered that payday loans are much more burdensome, this happens only for a very short period and this charge will disappear very quickly (of course, if the loan is repaid on time). In the case of installment loans, we have a lender for much longer, and the longer the commitment, the more difficult it is to predict what our budget will allow us, e.g. in six months. It must be admitted, however, that an installment loan of USD 1,000 can be easily integrated into even a limited monthly budget.
Unfortunately, the biggest disadvantage of installment loans is that free loans are not available and you have to be aware of the fact that they will generate additional costs that depend not only on the loan amount, but also on the repayment period.
Free payday loan – good for all occasions
The biggest advantage that payday loans get over installment loans is that you can take advantage of the promotion and get a free first loan if it is paid back on time. This can be a very good choice, especially if you decide to take out a loan with a possibility of repayment even in 45 or 60 days. It will be a solution not only the cheapest, but also much easier to pay back.
Payday loan and costs
When it is not possible to take a free payday pay, it is worth considering the choice taking into account the cost of both. One should take into account that the installment loan will be more expensive, but one can also notice the tendency that in some companies the costs of both will be similar. This may outweigh the fact that the installment loan will be a better option if you take into account its numerous advantages (including the fact that we pay less monthly).
There is not the only right choice
As you can see, both forms have their pros and cons. However, every loan should (and even must) be repaid on time. In the case of payday loans, accumulating the entire amount and giving up is at once sometimes difficult, which in turn may result in the fact that unfortunately you will have to decide to extend the repayment period of the loan or its refinancing, and even take into account that if the repayment is made it will expire, this will entail additional costs of recovery and enforcement proceedings.
Failure to pay the installment loan, in turn, will quickly result in termination of the loan agreement and equally high costs, without the possibility of extending the repayment period. That is why every decision should always be carefully considered.