Instantaneous payment and installment loan – find out the difference

A traditional payday loan will work when we need a small amount for a short time. If we are interested in a larger sum that we want to systematically repay, a long-term installment loan will be much better. for clarification

It is impossible to give a definite answer to the question which of these financial instruments is more advantageous. Whether we decide to reach for a payday loan or installment loan depends on our needs, possibilities and the amount we plan to apply for. Before we do it, however, let’s get acquainted with the basic information about both products and find out how they differ from each other

Payday loan – basic information

Payday loan - basic information

Payday loan is a short-term online loan which can be found in the offer of most non-bank institutions. You can take it without any formalities, usually you need an ID card, regular income, permanent address, telephone number and bank account to get it (we don’t need any additional guarantees or collateral).

We can take instant cash for any purpose, and we have 30 or 60 days to pay it (usually it is one installment). The amounts borrowed are much lower than for installment loans. Instantaneous payment is granted on the basis of a civil law agreement, which is concluded between us and the lender.

Installment loan – how does it work?

Installment loan - how does it work?

Installment loan is also granted by non-bank companies. In the case of an installment loan (in contrast to the payday loan, which we give in the form of one, sometimes two installments), we are obliged to pay it regularly (in the form of fixed, monthly installments, the amount and schedule of which can be found in the contract).

Similarly to payday loans, installment loans are granted to us on clear and transparent terms and can be used for any purpose. We apply for both forms of financial support online, and the decision whether the loan was granted to us is obtained almost immediately.

Instantaneous payment and installment loan – how do they differ?

Instantaneous payment and installment loan - how do they differ?

As we have already mentioned, payday pay applies to smaller amounts than the installment loan. The repayment period is also different. In addition, currently free loans mainly concern payday loans – we can borrow money only for a short time without incurring additional costs.

Both quick payday loan and installment loan have their pros and cons. Which one we choose should depend on what amount and for how long we need. Our financial capabilities are also important, as the choice of loan should be adapted to the content of our portfolio.

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