Installment Personal Loans vs. Payday loans
In general, payday loans are for a shorter duration than personal loans, have a higher interest rate, and are often paid back in a single, lump sum payment (often the next payday). In contrast, an installment loan is repaid over the course of many months and payments are evenly spread out over the term of the loan.
Borrowers with bad credit can turn to personal loans instead of credit cards or payday loans. The personal loan may allow them to have a more manageable stream of payments, and sometimes a lower overall interest rate. The other major benefit of a personal instalment loan is that the lender should report the borrower’s payment history to credit reporting agencies. This may help the borrower build a better credit rating when payments are made on time. Loan shoppers should confirm a lender reports to credit bureaus and which credit bureaus they report to in order to ensure they enjoy this benefit.
Taking better control of your finances
Finally, a personal loan’s repayment schedule could prevent you from falling into worse credit. A personal loan has equal monthly payments and a definite end date to your repayment schedule. On the other hand, a credit card debt can hang over your head forever if you only make minimum monthly payments. If you have a large credit card debt that you are not paying off fully every month, consider consolidating it with a personal loan. The structured nature of personal loan payments can better assist the borrower to develop a budget and stick to it!
At AvantCredit we offer personal installment loans with terms that range from 12-months to 72-months.