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Installment Loans: Better Repayment Terms Than Payday Loans

June 6, 2024
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When you need money to cover an unexpected expense before your next payday, you may see a few different kinds of businesses offering quick cash loans. Suddenly big flashing signs for payday advance loans catch your attention, and you may notice other loan places nearby such as Idaho Finance, that offer installment loans. With so many types of places offering quick cash, it can be confusing to understand which is the better option for you.

While both payday loans and installment loans can provide the cash you need, installment loans offer an advantage - more flexible repayment terms that can be personalized to fit your budget.  

How Short & Long Term Installment Loans Offer
More Flexibility than Payday Loans


The key difference between payday loans and installment loans are the repayment terms. The payday loan (usually $500 or less) and all the fees must be repaid in one lump sum, usually within 2-4 weeks. If you fail to do this, your interest rate and payments skyrocket and you can quickly be sent to collections.

Installment loans, however, allow you to borrow a larger amount, and you can pay it back over a longer period of time depending on your budget. The money payments are fixed so you don’t have to worry about your payment rising dramatically after a few weeks.

The interest rate you receive may depend on your credit score and other information.
 

Example of Payday Loan vs Installment Loan 


Payday Loan: Let’s say you borrow $300 from a payday loan place. On your next payday, you must repay the entire $300 plus up to $45 in fees.

Not only is this an extremely high interest rate compared to your loan, if you can’t repay that $345 out of your next paycheck, more “rollover” fees will be added, your debt snowballs, and it can lead to serious consequences.

Failing to repay the payday loan on time can lead to consequences such as:
  • Additional high “rollover” fees
  • Debt being sent to collections
  • The lender can sue you
  • Damaged credit score if reported to the credit bureau.
  • Garnished wages
  • Difficulty to be approved for other loans
  • A lien placed on your property

Installment Loan: However, if you borrow more money, say $1500 with an 18-month installment loan, you could make 18 payments of about $95 each (interest rate will depend on your credit).

The consequences of consistently missing payments on an installment loan can be similar to those of failing to repay a payday loan. However, because of the flexibility of repayment and the ability to set the terms to your budget, the likelihood of that happening goes down with an installment loan.

You have more time to pay back the loan. You set the number of months depending on your budget and what you can afford each month, and you know that number won’t change for the duration of your loan.

 

Payday VS Installment Loans: Idaho Finance Offers Flexible Terms 


A payday loan has no flexibility. You must repay the entire lump sum plus fees with your next paycheck. However, with the installment loan it can be short or long depending on your budget. You could repay it in 6 months or 18 months depending on your needs.

With a physical location in Meridian, Idaho Finance serves nearby Caldwell and surrounding communities. We are a licensed installment loan lender. We understand that life happens and will do our best to work with you to find a loan that fits your budget.