The Difference Between Single Payment Loans and Installment Loans
When you live paycheck to paycheck, your finances may be unprepared for anything beyond your regular responsibilities. But we all know that life happens and unexpected expenses come up because it’s an inevitable part of life. If something like a broken furnace and a parking fine come your way, you need to cover — regardless of what’s in your bank account. In these situations, many people look for ways to get money fast, secure and in a discreet way beyond letting their family and friends know they are in this situation. Often times, individuals look at options and benefits of a personal loan.
Options for personal loans could mean installment loans and single payment loans, which are structured very differently. Installment loans are generally designed to be repaid over a long period of time (i.e., multiple months) via scheduled, recurring, equal payments. These payments generally occur on a weekly or monthly basis based on your loan amount and schedule. Single payment loans are structured in a way to repay all of the balance on your next payday.
What is an installment loan?
An installment loan is an umbrella term that describes personal and sometimes business loans repaid over multiple payments. Long-term installment loans and short-term installment loans fall under this umbrella term. Long-term installment loans generally take several months to repay. When you pay off your installment loan, you owe nothing. Rates and loan amounts depend on your qualifications and income.
What is a single payment loan?
A single payment loan is a short-term, small-dollar, unsecured personal loan. It’s short-term because you usually have to repay it by your next pay date. It’s small-dollar because it’s usually $200 – $1,000, although some conditions and exceptions may apply depending on your lender, your finances, and your location. It’s unsecured because you don’t have to put up collateral like your car, house, or some other asset as a guarantee.
Whatever your unexpected expense may be, Devon Financial is here to help you with your financial needs so you can get back to your normal “lifestyle.”