How To Apply For Payday Installment Loans & What Are They
A classic Payday loan gives you quick access to fast cash with no credit checks. The average person looking for a payday is in a position of need and needs fast cash that can be paid off in one to weeks. Most often, people who go for a payday lease have a sudden emergency that they cannot afford to wait several weeks to resolve. A payday installment loan on the other hand is often financed at an amount that’s over $500 and can sometimes go well past $10,000. The other important difference is that payday installment loans are paid back in installments over a period of months or years. Payday advances are typically paid back in a few weeks.
Payday installment loans follow the same basic structure of small dollar amounts that can range from $100 to $1500. Most direct payday lenders offer up to $500, though, and if this is your state, you may be offered upwards of $1000. Loan amounts will vary just as anything does, depending on state laws and regulations. The amount you will be able to borrow from a payday loan lender will automatically increase as the amount you borrow, due to the fact that your loans are the same as a recent high-cost personal loan or installment loan. The amount of that increase will vary under state regulations. As a rule, if you borrow $500 from a payday lender, you will be given the standard 30-day loan period for that amount.
Payday installment loans charge around 15% of your loan amount as a fee to borrow the money. If you are unable to pay back the loan, most lenders will try to agree to renew your loan when you have repaid on time. The standard practice is that the entire fee from the lender is paid to the lender and when you renew, your rates and fees will increase as well as the loan size, but you will still pay the initial fee when you initially won. Most lenders offer a maximum of 36 such renewals, so you will be able to pay one-fourth of the standard fee each time on renewals. If you have no trouble paying back the loan you will still see a fee quoted. A fee of $20 fee may be charged for every $100 borrowed and $30 for every $500 borrowed. If you have a big enough amount to get a payday installment loan, you won´t likely find yourself paying any fees at all.
Should I get a payday loan or an installment loan?
Unfortunately, if you cannot pay back the loan, you will be put in a position where you will be harassed for the money. An unpaid payday loan or installment loan can lead to repossession and possible legal action. Banks or anyone else who has your credit score in mind will use it to show full credit and they will report the loan to credit agencies and eventually, those scores will go down as you start to not make payments on time. Eventually, you can find yourself in an even worse position than before.
That is where the big fees come in. Short-term loans will have larger fees than those offered by long-term loans. Borrowers might be Pricing leverage increases, fees for defaulting, or compounders that increase the annual percentage rate you pay monthly.
Alternatives to a payday installment loan
One of the larger disadvantages of a payday installment loan is the fact that most states have usury laws that prohibit companies from giving individuals high rates. Generally, this only extends to payday loans. It does not apply to long-term loans or car title loans. For instance, if you are being charged 24.5% for a $300 payday loan, you know that is outrageous. Most people do not sign, without knowing how many years their loan is set for.
Moreover, most payday lenders have local offices where they can be contacted. People do talk to representatives and lenders about their rates and fees, whether a certain lender can get away with charging a certain rate. At the end of the day, if you are considering a payday loan, you should know how long you will likely be paying those fees back. If you can’t afford to pay them back in the required time, you should look for other options.
Interest rates and fees with a payday installment loan
When you are looking for a payday loan, you might find yourself expecting to pay a fee much closer to the amount you borrow because of the high interest rates. If you actually calculate the payoff, you will find that the interest rates can range from payday loan fees that range from around 30% to well over 100%. However, that is the average and many individuals pay much higher daily or yearly fees based on how much they borrow.
The best way to find out if you are charged an excessive amount is to payoff info from your lending company and find the interest rate is about what you would pay for a long-term loan. This will be the rate for a payday loan, but will also apply to car title loans, second-chance checking, and other types of personal loans. It is a good rule of thumb to keep in mind, you will pay more than for a payday loan, but the loan fees and APRs for short-term loans are less than credit cards.