Instalment Loans Vs Payday Loans

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Instalment Loans Vs Payday Loans

At Australia Cash Loans we are firm believers that instalment loans are more useful for people needing short term loans than are payday loans. An instalment loan is far less harmful to the borrower who is already in tough financial straights. It is hard to justify why a company would require payback within a few short weeks when they know the borrower is facing money issues. It basically comes down to profit margins.

What is an instalment loan?

An instalment loan is a loan that is short term in nature that many people choose for emergency needs. The interest rates are generally higher than traditional loans but usually lower than other short term options. Repayment is achieved over a set period of time in regular predefined instalments. Each payment reduces the total debt by the amount of the payment. Most traditional financing falls into this category such as mortgages and automotive loans. Unlike traditional loans, short term instalment loans (such as we offer at Auscashloans) are unsecured. This means there is no collateral required to secure the loan.

Benefits of instalment loans

  • Fast and Easy

    It doesn’t take that long to get the money when you take out an installment loan. You can usually get the money deposited directly into your account in just a few minutes after being approved.

  • Predictable Payments

    there is a fixed interest rate when you take out an installment loan. Your payments will be set up at the time you take out the loan so your payment will always be the same. You will know exactly how much to pay out of each paycheck.

  • Longer Terms

    Unlike payday loans, instalment loans allow you to repay your loan in equal instalments over a longer period of time, from ten weeks to three months.

What is a payday loan?

A payday loan is the simplest type of loan. You borrow money today and agree to repay it in full on the next day that you get paid. It is not unlike borrowing money from family and offering to repay them when you get paid. The biggest difference is the amount of interest you will repay to the payday loan company as opposed to a family member. This type of financing is only recommended if there is a dire need for getting money fast. Not being able to pay when agreed will cause a lot of future financial stress.

  • Easy To Get

    Most people who have a job and are of legal age at the time they apply are eligible to get a payday loan. The requirements are very easy to meet.

  • Convienient

    Other then getting a loan online there seems to be a loan shop on almost every corner these days. It is never hard to find a willing company to make the loan.

  • Very Fast

    When applying online, the amount of time before you can have money in your bank account is usually counted in minutes as opposed to days.

How to choose between payday and instalment loans

When the need arises for a short term loan the process is often clouded by emotions of the borrower. At the point they realize they are in financial trouble it is often to late and in some cases is an unbearable weight. We believe that if you have a choice, an instalment loan is always a better option during these times of high stress. Many people rush into payday loans with full knowledge that they will not be able to pay it back on time. It is not normally intentional but instead driven by the fear they are currently experiencing being short of funds. An instalment loan during a period of rash borrowing can help soften the blow when it is time to make your payments. Apply now for a short term instalment loan at Australia Cash Loan.