The real difference between payday and installment loans | finder.com
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Compare payday loans and installment loans

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Find out the difference between payday loans and installment loans: Fees, interest and what the right loan is for you.

If you’re looking for financing, you may be wondering what the right type of loan is for you. Are you in need of a small loan or something larger? What kind of purchase are you looking to make with the loan? And what kind of financial situation are you in? All this will affect your decision.

If you’re on the lookout for immediate finance, you might be considering an installment loan or a payday loan – also referred to as a payday loan. To help you decide which one is the better choice for what you need, we’ve broken down each loan type to help you understand the differences between the two.

Check into Cash Payday Loan

Check into Cash Loans

Check into Cash allows you to directly apply for a payday loan and have your cash when you need it.

  • Min. Loan Amount: $50
  • Loan Term: Varies by state
  • Turnaround Time: 1–2 business days
  • Total Costs: Varies depending on the amount and your state of residency.
  • Must be 18+
  • No security needed
  • Confidential and secure!

    Quick define: payday loans and installment loans

    Payday loans

    These are small credit solutions of around $100 to $1,000 designed to be repaid in the short-term. These loans can be applied for by people with less-than-perfect credit history and repaid in one lump sum, usually on your next payday. The annual percentage rate (APR) for these loans is quite high, usually in the hundredth percentile, but the actual rate you are offered depends on the state you reside in. Payday loans are not legal in every state.

    Installment loans

    These loans are for larger amounts and for longer terms than payday loans. Loan amounts range from $1,000 to $100,000 and terms can be from 6 to 60 months (5 years). The payments made to this type of loan are made in installments, hence the name. While installment loans have come to be associated with bad credit borrowers, they can be taken out by those with good or bad credit and are available from banks, standalone lenders or credit unions.
    Find out the regulations for payday loans in your state

    The key differences

    The typical borrower

    Payday loans

    While every borrower differs, the flexible eligibility criteria attracts borrowers that:

    • Have bad credit or no credit history
    • Lower-income earners
    • Have no bank accounts if they are applying in-branch or at check cashing stores
    • Need small loans with a quick turnaround

    Installment loans

    As with payday loans, there is no “typical” borrower with an installment loan. Borrowers can:

    • Have good credit or bad credit, with lenders catering to both
    • Be looking to borrow a larger amount and pay off the loan over time
    • Want to take out a secured or unsecured loan

    Loan amount and terms

    Payday loans

    • Loan terms and maximum amounts are regulated at a state level
    • You can usually borrow between $50 and $1,000
    • Terms are normally offered between 7 and 60 days

    Installment loans

    • This varies greatly between lenders. You can borrow anywhere between $1,000 and $100,000 depending on the lender and your eligibility
    • You pay off the loan in installments over a term of between 6 and 60 months (5 years)

    How much it will cost

    Payday loans

    • Payday loans are notoriously costly. Typical APRs reach into the hundredth percentile, but what you will actually pay depends on what state you live in. Remember that payday loans are lent over the short-term, so while APRs are a good representative cost of the loan, you will not pay back that full cost over a year.
    • If you cannot pay off the loan within the terms provided, it could lead to refinancing or rolling over the remaining amount. Doing so can incur extra fees and charges.

    Installment loans

    • Installment loans vary greatly in costs. How much you will pay depends on how good your credit score is, whether the loan is secured or unsecured, what lender you applied with, among other factors. Some lenders will let you get a rate estimate before you apply without it affecting your credit score.

    Lenders offering the loans

    Payday loans

    Weighing up all your loan options is important before applying for any type of credit. Are payday loans or installment loans the better bet? It depends on what you need.

    Payday and installment loans you can apply for today

    Rates last updated December 19th, 2018
    Unfortunately, none of the short term loan providers currently offer loans in your state. Learn more about short term loans in your state to find an alternative.
    Name Product Product Description Max. Loan Amount Turnaround Time Requirements
    CashUSA Installment Loans
    A connection service for quick cash loans up to $10,000.
    $10,000
    As early as 1 business day
    Must have a monthly income of $1,000+ after taxes and valid checking account.
    Jora Installment Loans
    Installment loans with repayment terms up to 30 months, depending on your state.
    $2,600
    1–2 days
    Must have an active checking account, regular source of income and email address.
    OppLoans Installment Loans
    Installment loans with competitive rates from a top-rated direct lender.
    $5,000
    1 business day
    Must have direct deposit and meet minimum income requirements
    CashNetUSA Loan
    Apply for a short-term loan with an easy online application and dedicated customer service.
    Varies by state
    1 business day
    You must be a US citizen or permanent resident, be at least 18 years old and have regular income and a bank account.
    LendYou Short-term Loans
    Apply online with this loan-connection service offering unrestricted short-term loans with fast turnaround.
    $15,000
    1 business day
    You must be a US citizen or permanent resident, age 18+ and have a regular income.
    Check into Cash Payday Loan
    With 1,000 branches in 30 states, get $50 to $1,000 in days from this direct lender.
    $1,000
    1–2 business days
    You must be at least 21 and an American citizen and have a bank account, email address and phone number.
    ACE Cash Express Short-term Loans
    Quick payday, installment and title loans with no prepayment penalty and a 72-hour satisfaction guarantee. Funds can be loaded on an ACE Elite™ Visa® Prepaid Debit Card.
    Varies by state
    Generally receive the money the next business day
    Must be 18+ years old, have a steady source of income and a checking or savings account. Must not be a debtor in bankruptcy.

    Compare up to 4 providers

    Rates last updated December 19th, 2018
    Unfortunately, none of the short term loan providers currently offer loans in your state. Learn more about short term loans in your state to find an alternative.
    Name Product Product Description Max. Loan Amount Turnaround Time Requirements
    OppLoans Installment Loans
    Installment loans with competitive rates from a top-rated direct lender.
    $5,000
    1 business day
    Must have direct deposit and meet minimum income requirements
    Jora Installment Loans
    Installment loans with repayment terms up to 30 months, depending on your state.
    $2,600
    1–2 days
    Must have an active checking account, regular source of income and email address.
    CashUSA Installment Loans
    A connection service for quick cash loans up to $10,000.
    $10,000
    As early as 1 business day
    Must have a monthly income of $1,000+ after taxes and valid checking account.
    Blue Trust Loans Installment Loans
    Get an installment loan from an online tribal lender. Perks for returning borrowers.
    $2,000
    As soon as next business day
    Must be at least 18 years old and have a verifiable source of income with direct deposit into your checking account.
    LendYou Short-term Loans
    Apply online with this loan-connection service offering unrestricted short-term loans with fast turnaround.
    $15,000
    1 business day
    You must be a US citizen or permanent resident, age 18+ and have a regular income.
    CashNetUSA Loan
    Apply for a short-term loan with an easy online application and dedicated customer service.
    Varies by state
    1 business day
    You must be a US citizen or permanent resident, be at least 18 years old and have regular income and a bank account.
    Slam Dunk Loans
    Potentially get approved for a short-term loan through this lender-connection service, even with poor credit history.
    $2,500
    As soon as next business day
    Must be employed, receive regular income, earn at least $800 a month, have a checking account, be 18+ yrs old and a US citizen.

    Compare up to 4 providers

    Are payday loans available in my state?

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    2 Responses

    1. Default Gravatar
      SabrinaSeptember 20, 2017

      I’m trying to figure out what’s better to do, a payday loan or installment loan? I need a few extra money for rent I’m short about 230 dollars. What is my best option? I know I can’t pay it back all at once and I’m trying to pay back little as possible.

      • Default Gravatar
        JonathanSeptember 21, 2017

        Hello Sabrina,

        Thank you for your inquiry.

        Generally, payday loans or also known as short-term loans payment terms is 2 weeks to one month. Looking at your repayment preference, it may be more advisable to have an installment loan.

        Installment loans can have repayment plans between 6 months to 5 years. Kindly select your state of residence prior choosing your lender as availability depends on certain locations.

        It is worth mentioning to review the eligibility requirements and loan terms prior applying. Should you find the rates high, your alternative could be credit cards, as long as you have good credit.

        Hope this helps.

        Cheers,
        Jonathan

    US Payday Loans Offers

    Important Information*
    CashNetUSA Loan

    Apply for a short-term loan with an easy online application and dedicated customer service.

    Check into Cash Payday Loan

    With 1,000 branches in 30 states, get $50 to $1,000 in days from this direct lender.

    OppLoans Installment Loans

    Installment loans with competitive rates from a top-rated direct lender.

    LendYou Short-term Loans

    Apply online with this loan-connection service offering unrestricted short-term loans with fast turnaround.

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