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

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What Are Payday Loans?

Payday loans, also known as cash advances, are short-term, unsecured loans designed to provide quick financial support to cover unexpected expenses until your next paycheck. You can get the cash you need to handle any emergency situation that comes your way.

  • A short-term loan, typically of a relatively small amount
  • A loan to help you cover expenses until you get paid again
  • A loan you pay back with your next paycheck (or with your next two paychecks)

Why Choose Installment Loans Over Payday Loans

Are you considering a payday loan to cover unexpected expenses? Wise Loan offers a superior alternative: installment loans. Unlike payday loans, which require full repayment on your next paycheck, installment loans provide a more flexible repayment schedule, allowing you to manage your finances more effectively.

Payday Loans vs. Installment Loans

Traditional payday loans aren’t the same as installment loans. Personal loans are a type of installment loan. Check out how these two credit options differ:

Installment Loans Payday Loans
Helps you cover unexpected expenses Yes Yes
Loans limited to a small amount (A few hundred dollars or less) Not limited to small amounts Yes
Limited to how much you can pay back within a few weeks or on your next payday No week limitation Yes
How long you have to pay it off Ranges from a few months to one year A couple of weeks
Interest rate Varies depending on your credit score and other factors Relatively high but charged as a fee for a short-term loan

Key Benefits of Wise Loan’s Installment Loans

 

Same Day Funding: Meet the requirements for instant funding installment loans and receive your cash within minutes. First time customers are eligible to receive $200-$1,500 TODAY with FREE same day funding. Returning customers can get up to $3,500 based on their eligibility.

Longer Repayment Period: Avoid the pressure of repaying your loan in a short timeframe, like with payday loans.

Bad Credit Loans: Wise Loan’s installment loans for bad credit are designed to assist individuals who have a less-than-ideal credit history. These loans provide an opportunity for people with poor credit scores to access the money they need when they need it most.

Build Credit: Wise Loan reports all timey payments to all the major credit bureaus, helping you improve your credit score as you pay back the loan.

Cash Back Rewards: With our Nest Egg Rewards Program, you could be eligible to earn $10-$50 towards per $1000 borrowed when the loan is fully paid.

How to Apply for an Installment Loan with WiseLoan

 

  1. Complete our fast and easy online application form.
  2. Review and accept the loan terms and conditions.
  3. Receive your loan approval and funds in your account, with instant funding available to those who qualify.
  4. Repay the loan in affordable installments over a period of time, as per the agreed-upon terms.

Common Uses for Installment Loans

Installment loans can be used for a variety of emergency expenses, just like payday loans, including:

  • Car repairs
  • Medical emergencies
  • Unexpected bills
  • Home repairs
  • Travel expenses
  • Debt consolidation
  • Other unforeseen costs

Say goodbye to the drawbacks of payday loans and embrace a more responsible and flexible financial solution with WiseLoan’s installment loans. Apply online today to get the funds you need while enjoying the benefits of a better alternative.

In What States are Installment Loans Available?

Wise Loan offers payday loans to applicants in the following states:

Frequently Asked Questions (FAQ)
About Payday Loans and Installment Loans

What is the main difference between payday loans and installment loans?
The main difference between payday loans and installment loans is the repayment structure. Payday loans require a lump sum repayment on your next payday, whereas installment loans allow you to make smaller, scheduled payments over a longer period of time. Installment loans offer more flexibility and are generally a more manageable financial solution compared to payday loans.
Why should I consider an installment loan instead of a payday loan?

Installment loans offer several advantages over payday loans, such as:

  • Flexible repayment terms: Customize your payment schedule, making it easier to meet your financial obligations.
  • Lower interest rates: Pay less interest compared to payday loans, saving you money in the long run.
  • Higher loan amounts: Borrow up to $1,500, depending on your eligibility, to cover a wider range of financial needs.
  • Longer repayment period: Avoid the pressure of repaying your loan in a short timeframe, like with payday loans.
  • Build credit: Timely repayments of your installment loan can help improve your credit score.
Can I use an installment loan for the same purposes as a payday loan?

Yes, installment loans can be used for a variety of emergency expenses, just like payday loans. Common uses include car repairs, medical emergencies, unexpected bills, home repairs, travel expenses, debt consolidation, and other unforeseen costs. The primary difference is that installment loans offer a more manageable and flexible repayment structure.

How do I apply for an installment loan as an alternative to a payday loan?

Applying for an installment loan as an alternative to a payday loan is easy. Follow these steps:

  1. Complete the fast and easy online application form.
  2. Review and accept the loan terms and conditions.
  3. Receive your loan approval and funds in your account, often within 24 hours.
  4. Repay the loan in affordable installments over a period of time, as per the agreed-upon terms.
How do you pay back payday loans vs. how do you pay for installment loans?

When repaying a payday loan, you are typically required to make a single lump sum payment on your next payday, which covers both the principal and the interest. This payment is usually made through an automatic debit from your checking account or by providing the lender with a post-dated check.

In contrast, installment loans are repaid in smaller, scheduled payments over a predetermined period of time. The payments include both principal and interest, and the loan term can vary depending on the lender and the borrower’s preference. These payments can also be made through automatic debits or other agreed-upon methods.

How is the interest rate on a payday loan calculated vs. the interest rate on an installment loan?

Payday loan interest rates are typically expressed as a fee per $100 borrowed, which can range from $10 to $30 for every $100 borrowed. This equates to an annual percentage rate (APR) of 400% or more, depending on the loan term and fees involved.

On the other hand, installment loan interest rates are usually expressed as an annual percentage rate (APR). The APR for installment loans is generally lower than that of payday loans, making them a more affordable option. The exact interest rate depends on factors like the loan amount, loan term, and the borrower’s credit history.

How fast do I need to pay a payday loan?

Payday loans typically need to be repaid within a short period, usually by your next payday, which is generally between two and four weeks from the date you took out the loan. This short repayment term can make it difficult for borrowers to pay off the loan in full, leading to a cycle of debt and rollovers.

How fast do I need to pay an installment loan?

The repayment period for installment loans varies depending on the loan terms and the borrower’s preference. Generally, installment loan terms can range from a few months to a year, allowing for more manageable payments and a longer time to repay the loan. This flexibility reduces the risk of default and provides borrowers with a more sustainable solution for their financial needs.

The recommendations contained in this article are designed for informational purposes only. Essential Lending DBA Wise Loan does not guarantee the accuracy of the information provided in this article; is not responsible for any errors, omissions, or misrepresentations; and is not responsible for the consequences of any decisions or actions taken as a result of the information provided above.

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