The bank refused you a loan? Fortunately, there are other safe ways to get extra funding. For example, you can use the offer of a non-bank loan company. Many companies, which offer their customers an online installment loan. How is it different from a regular payday loan? You will find the answer in this article.
Payday repayment date, i.e. when do you have to return the money?
Contrary to appearances, quick loans have a long history. They began to be granted in the United States in the 19th century. A payday loan is a non-bank loan that you have to pay off in a very short time. Taking into account the offers of the majority of entities operating on the Polish market that provide this type of financial support, the time to pay off the payday loan is only about 30 days. Importantly, the repayment date is the deadline. This means that if you fail to do it within the specified time limit, you must take into account the initiation of the debt collection procedure and entry into the debtor’s database. So what is the difference between payday loans and installments?
Deadline for the loan to the council. What are the typical conditions and when should you return the funds?
A non-bank installment loan is a much safer solution and much more similar to a bank loan. First of all, the monthly cost of an online installment loan is lower than for payday loans. By choosing this type of financial aid, you will also borrow much more money. The highest amount you will receive thanks to a payday loan is approx. 5 thousand. PLN.
What’s more, its repayment can be divided into convenient installments. In the case of our loan, you can pay off for up to 48 months- of course, depending on your needs. Financial support in the form of installments is very convenient, as confirmed by our clients. For example, Mr. Roman borrowed from us in March 2019 – PLN 10,000. The repayment of this amount is broken into 10 months. Thanks to this, the return of this commitment was not a big burden for him. In the meantime, Mr. Roman received a pay raise, which made it even easier for him to pay off the entire sum.
Installment loan and payday loan – important differences
Although the APRC of installment loans will not be 0%, which is very often the case with payday loans, taking the latter is associated with a greater risk of falling into the debt loop. Why? Because failure to pay it on time is associated with the obligation to pay very high interest.
First of all, a payday loan with an APRC at 0% is always and without exception part of a promotional offer by a given loan institution, and not part of the standard offer. What does this mean from your perspective? By taking a free payday loan, you sign not only the loan agreement itself but also the promotion regulations.
The latter provides that the possibility of taking advantage of the promotional interest rate conditions requires timely repayment of the liability. So if you are late with a payment, you must take into account
In summary, the most important differences between an installment loan and a payday loan include:
- the risk of falling into the debt loop (higher with payday loans)
- repayment date (longer for an installment loan)
- transparency of conditions (higher with installment loans)
- support amount (higher with installment loan)
Installment loan vs payday loan. Find better option?
So what is ultimately a better option – an installment loan or a payday loan? It is very popular to believe that payday loans are used to finance “smaller expenses”, while installment loans should be decided, for example, in the case of renovation, purchase of more expensive equipment, etc. This division is not completely truthful. Remember that the installment loan does not have to be for only 10 or 20 thousand. PLN.
You may as well borrow an amount of 2.3 or 4 thousand. PLN and the repayment can be safely spread over many months. Another important piece of information is how banks “see” debt from payday loans and online installment loans.
A payday loan is most often visible as a liability every month. This means that when applying, for example, for a bank loan, the bank will see in BIK that your monthly loan burden is, for example, PLN 2 or 3 thousand. Installment loan in this respect, is much more advantageous, because in its case, BIK presents the actual monthly burden, i.e. simply the amount of the installment to be repaid every month. Also, in the case of online installment loans, you can commit the maximum amount that is offered, which is not always possible in the case of payday loans.
When you have larger expenses planned, installment non-bank loans are a good idea because you can get up to PLN 25,000. Use the loan also in a situation where you know that you will not be able to pay off your liability in a short time.