A payday loan requires complete payoff, including fees and interest on your next payday, or you must pay the fees and interest only to owe the same total amount next payday. With a monthly installment loan, you can either make a small monthly payment as scheduled or pay off the full amount and receive a rebate on the unused portion of interest.
Monthly Installment Loans get repaid on a monthly basis over a fixed period of time. You can repay your loan over a minimum time of two (2) months. If you need more time, you can repay it for up to 12 months. Remember, if you are able to pay off sooner, there is no penalty, and the unused portion of interest will be rebated to you.
Repayment of your loan is discussed with your Loan Officer. They can give you advice on how you can pay off your loan without spending all of your savings. Just remember, the longer you take to pay off your loan, the more interest will be paid.
Now, for Payday Loans, repayment is automatically on your next salary pay-out. A lending company refers to your submitted payslips or pay stubs for when you will receive your salary. If you miss paying the entire amount of your loan, you’ll be charged all fees and interest only to owe the same amount next payday. With a Monthly Installment Loan, your balance goes down as you pay with no additional fees or interest for on-time payment.
Having to pay full principal, fees, and interest on a payday loan can be very difficult if you could afford that much money each paycheck you probably would not have needed the loan in the first place. If you are unable to pay all principal, fees, and interest, the fees and interest must be paid only to start over the next payday.
The average time before you need to repay your entire loan amount is 14 days. In some states, lending companies can require you to pay within ten days. This can become a difficult loan product to service for any borrower.
Interest Rates & Other Fees: Monthly Installment Loan vs. Payday Loan
In the subject of Interest Rates and other fees, banks and lending companies have their own set amounts. Different states also have different approved rates for any type of loan.
- $18 per $100 per year on the first $2,010
- $8 per $100 per year on the amount over $2,010 but not over $16,750
- Acquisition fee
- Document fee
- Administrative fee
- Recording fees
- Non-filing insurance fees
Other companies may charge incredibly HIGH add-on interest rates, but NOT Tiempo Loans. Get Monthly Installment Loans for only $4 per $100. Plus, Tiempo Loans only add an acquisition fee of $10 per $100 (up to $100 fee). No other charges, whatsoever!
Learn more about Tiempo Loan’s Monthly Installment Loans or Apply Now and wait for a call from a Loan Officer.
With Payday Loans, you will also get an add-on interest rate and other fees. The average add-on interest rate is $15 per $100.
When add-on interest rates and other fees are combined, they’re known as the Annual Percentage Rate (APR). According to CNBC, the APR for payday loans can be as high as 700% percent. The state of Texas has one of the highest with a 660% APR.
Application Process: Monthly Installment Loan vs Payday Loan
Sometimes, applying for a loan can be scary. The thought of a disapproved application immediately stops you from even doing the first step.