In the world of monetary loans, installment loans and payday loans are the two primary loan types most individuals will explore when in need of financial assistance. What’s the difference between the two, though? Let’s break both down and explore them further.
An installment loan is typically a short-term, unsecured loan. The interest rate may be high, but certainly not as high as a payday loan. You repay the full amount, plus interest, over a predetermined amount of time. Some advantages of an installment loan include:
Payday loans have received a lot of criticism over the years. Consumer advocates and the Consumer Financial Protection Bureau have examined payday loans closely. Such loans often carry high interest rates and are aimed at low-income individuals.
Here’s a bit of information: