If you are in a tight spot and are in need of cash, you might be thinking about taking out a payday loan. Although a payday loan can be a good option when you need money right now, there is another option that you can consider: an installment loan. There are easy-approval lenders out there that offer installment loans, which are loans that allow you to make multiple payments over the course of a few months to a few years, as an alternative to payday loans. These are a few reasons why this might be a better choice.
Take More Time in Paying it Back
In general, payday loans have to be paid back on your next payday. This means that you might only have a week or two -- or maybe a month, depending on your payment schedule -- to repay them. They are usually used to get you by until payday, but as you probably already know, it's not always easy to pay all of the money back that quickly.
With an installment loan, the terms are generally longer. You may make weekly payments, depending on your lender, or you might make monthly payments instead. Either way, you will generally be given much longer to repay the loan. This can help with budgeting and can help you get out of the financial bind that you might be in.
You Can Often Borrow More Money
Payday loans are usually relatively small since the loan amount is typically based on the amount of money that you will be paid on your next paycheck. Installment loans are often secured by some form of collateral, such as a vehicle or a piece of jewelry, so you are typically allowed to borrow more if you bring in a more valuable item to use as collateral. If you need to borrow more than a few hundred bucks, an installment loan can be a better option.
You Can Often Renew the Loan
With a payday loan, you can find yourself in a rather vicious cycle if you are unable to make your payment in full on the due date. With installment loans, you can often renew the loan for an extended period if you need to, although you will generally have to pay more in interest and fees for doing so. In some cases, you can even borrow more money if you renew your loan after making multiple payments.
As you can see, an installment loan can be a better option if you are in a tough financial spot and are thinking about taking out a payday loan. Contact a lender near you that offers installment loans to find out more about the benefits.