What’s the Difference between Installment Loans vs. Payday Loans?

Both payday loans and installment loans are options if you need cash fast to pay for an expense. Compare the features and benefits of each loan to determine which loan is best for you.

What is an Installment loan?

Installment loans allow you to borrow a fixed amount and then pay it back over time or in monthly installments. Installment loans are usually affordable and don’t come with prepayment penalties. It’s easy to set a budget and determine how much you owe upfront.

What is a Payday Loan?

Payday loans are short-term loans that you repay with your next paycheck. Payday loans typically payback in two to four weeks. Even though your credit score won’t be considered, you may be approved for a loan in as little as one day. A payday loan may be a good option if you need quick cash to pay your bills or get your next paycheck.

Comparison of installment and payday loans

There are many variations between payday loans and installment loans.

Lender Loans

Installment loans are available in amounts up to thousands of dollars. However, payday loans are usually only available to a handful of people.

Repayment periods

Repaying a fixed-rate installment loan can take several months. Payday loans will need to be repaid within weeks of your next paycheck.

APR on Loans

Payday loans usually have lower interest rates and fees than installment loans. Payday loans may have an APR of up to three digits.

Credit checks

Before approving you for a loan, many lenders will review your credit score. At the same time, payday lenders might check your credit score to approve you for a loan. They may not require that you have good credit. However, installment loans typically have lower creditworthiness requirements than traditional loans.

Are you in search of a Payday or Installment loan?

You may be able to differentiate between an installment loan and a payday loan. A payday loan may be an option if you need cash quickly, and you are sure that you will repay the loan by your next paycheck. An installment loan might be better if you cannot repay the payday loan or wish to borrow additional cash.

IPASS offers Installment and Payday loans

IPASS offers both payday and installment loans that can be used to quickly get you the cash you need. Your funds will be available after applying for an installment loan from IPASS as long as your application has been approved.