Payday Loans Online
Life happens, and unexpected expenses can sometimes come up before you get paid again. When this happens, short-term loans can help. However, the structure of payday loans can sometimes be tricky for many because of the single large payment and fees that are involved.
We usually suggest checking on the option of an installment loan first, since the payments are spread out and can be more easily accommodated in your budget. We work with a selection of lenders who will provide you with fast and clear loan options, both with short-term loans and installment loans, so that you can choose the financial solution that best meets your needs.
How Payday Loans Work Online
A payday loan is a small, short-term loan, generally for $100 to $1,000, repaid in one payment when you receive your paycheck. These loans are easy to obtain. However, their relatively high cost due to fees and their short terms of repayment make it a good idea to compare the good and bad sides of a payday loan with an installment loan.
Want to learn more? Check out our in-depth guide to online payday loans.
If you are looking for a loan with a better payment plan, an installment loan might be a better fit. This kind of loan enables you to repay the amount of the loan in full over a period of time in regular payments. This gives you the advantage of knowing what your regular monthly payment will be and also the exact date when the loan will be repaid.
Typical Use
Payday loans are often used to pay urgent bills like auto repair, doctor office co-payments, or electric bill past due amounts. If more than one paycheck will be needed to repay, an installment loan is a better option in most cases.
Fast Application and Funding
The application can be filled out in a matter of minutes. If approved, the money could be deposited as soon as the same day (depending on the bank). The lender looks at income and activity at the bank in order to size the offer. Many will give an installment option as well, should it be a preferred solution.
Costs to Consider (Simple Example)
Payday loan: Borrow $400 with a $20 per $100 borrowing charge.
Total amount due the next payday: $400 + $80 charge = $480, all in one large sum.
Installment loan: Borrow $400 for 4 months with a set monthly payment.
You pay back in 4 small payments, rather than making a large payment all at once. The total amount will vary depending on the APR, but the pay schedule is easier and avoids the repeat rollover loans.
Payday vs. Installment Loans (Quick Comparison)
| Feature | Payday Loan | Installment Loan |
|---|---|---|
| Typical Amount | $100–$1,000 | $300–$5,000+ (varies) |
| How You Repay | One lump sum on payday | Monthly payments over a set term |
| Budget Impact | High pressure on next paycheck | Predictable, smaller payments |
| Risk of Rollovers | Higher if you are unable to pay in full | Lower due to spread-out payments |
| Credit Building | Limited | On-time payments may help your credit |
Why Many Choose Installment Over Payday
Payday loans are great for getting cash in a hurry, but they require quick repayment. If cash is tight, this can be a problem! Installment loans are a different story:
- You will have a payment plan with a schedule.
- You know just when you're done paying.
- You will be less likely to borrow additional amounts just to pay the full amount due.
Want to find out how this works for you? Try our loan calculator to compare plans!
In Search of Affordable Loans?
Payday loans can be effective for small, immediate requirements, but make sure you can pay them on time! But, in most other circumstances, the installment loan provides regular payments and a much more certain means of getting out of debt!
Check our installment loans page and see if it fits better!
Frequently Asked Questions
What are the risks of payday loans?
The high fees and short terms may mean that it is likely you will perform rollovers if you cannot pay in full. This may pile up the costs and keep you in a borrowing cycle.
How are installment loans different than payday loans?
The difference with installment loans is that they break up the payment into monthly payments with a certain end date. It is easier to prepare for this than for a total lump sum payoff.
Why consider an installment loan instead?
The smaller steady payments mean less pressure on your next paycheck. Also, paying on time will help your overall credit profile.
Can I switch from payday loans to installment loans?
Yes, there are many lenders who offer installment loans, which also provide more time and more stability. If a payday loan looks pinched, ask to see an installment offer before you agree.
What if I am not sure which loan to take?
Run your numbers first. Look at the total cost, the due dates, and how each will fit your next two paychecks. If the lump sum looks tight, an installment plan is usually safer.