Payday Installment Loans: Are They Worth It?
Whether to take out payday installment loans depends entirely on an individual and their circumstances. What works for some people isn’t always right for others and generally, payday installment loans should be met with caution anyway.
Though not as bad as the standard alternative, where full payment is required within two weeks, monthly installment payday loans are still dangerous. Keep reading to learn more about them.
What is a Payday Installment Loan?
Put simply, a payday installment loan is pretty much the same as an ordinary payday loan except it can be paid in installments. This doesn’t necessarily improve the loans other than to offer a slight bit of flexibility to the borrower. Besides that, nothing changes. The hiked interest and dubious amount of loan acceptances are notable attributes of these types of payday loans too.
Depending on the lender, some people could wind up locked into an agreement that could take years to pay off. Imagine still paying off a payday loan two years later? What makes payday loans popular is that impulsive and imminent need for cash that we all endure at some point. There are really no excuses for taking out payday installment loans because while it’s branded as flexible, it’s just as predatory in nature as the short-term alternative.
To make matters even more expensive, a lot of providers charge a blanket fee just for lending the money in the first place. This can come in the form of a percentage or a fixed-fee, so be careful if you’re borrowing large amounts and find there’s a 5-10% origination fee.
High Interest Rates
If you’re not lucky, you could drive yourself into the ground by taking out just one of these loans. APR has been known to be as high as 300% with payday lenders and the charges only get worse the further it cripples you. It’s a surprise so many of these companies get away with it.
Most lenders will want access to your bank account to ensure you pay up as promised. These payments, funnily enough, are still taking on your actual payday with little room for flexibility. Anyone taking out a payday installment loan can spread it from one day to a few years.
Thankfully, payday installment loans don’t lend huge amounts of money and it’s doubtful the government would even allow it anyway. Users can borrow anywhere between less than $100 to a couple of thousand. This all soon adds up though when you include interest, origination fees, and any late payment charges.
Sending your application is as easy as signing up for a website. It literally takes a couple of minutes to give an answer once they’ve received your information. Many payday lenders will first run a credit check on borrowers but not all.
The instant gratification that lures in payday borrowers is made worse by the fact that most people will receive their money on the same day. This isn’t always the case as it depends on how much you borrow and at what time in the day, but it certainly makes things more convenient for the time being.
Don’t dive head first into payday loans because you’ll be stepping into dangerous territory. The interest you pay is almost never worth it.
The only real benefit of typical payday loans is that you can be done with them more quickly, but even then that’s tenuous. Both forms of loans are difficult to pay back and are marketed at the people who’ll suffer the most.
Don’t be fooled by payday installment loans because they’re the same thing. The only difference is that’ you’ll be stuck with it for years.
Should You get a payday Installment Loan?
Honestly, whether to take out payday installment loans is entirely up to you. You might have an emergency to deal with or are looking for ways to get out of debt fast, but there may also be other lending opportunities available that come with less interest and more desirable repayment terms.
If you’re able to find one that works for you then it’s likely a good idea to take it, just be cautious when considering payday installment loans online. The interest is honestly quite audacious and it’s hard to see how they are worth it versus an installment loan for bad credit, for example.
Payday Installment Loan Alternatives
There are a lot of great lending options out there that don’t require enduring massive interest rates and linear repayment terms. If you’re looking for the best installment payday loans, the truth is, that’s time better spent exploring the alternatives. Secure and unsecured loans and personal installment loans are widely available now and don’t require a trip to the bank.
If it’s possible, asking your family and friends for a loan will usually be the better option since it probably won’t come with any interest and the payment period will be more relaxed than with online lenders.