What’s the Difference Between Instant Loans and Payday Loans?

Payday loans have earned a bad rep over the years. While they can be the most convenient loans you can find, they tend to charge higher interest rates than other forms of credit in lieu of this convenience. However, other types of loans like instant loans, are available which have grown recently. Let’s understand how these two are different.

Payday loans

Payday loans are quick and easy to take and are to be paid back in a lump sum the next month or on your next payday. The amounts for an installment payday loan are usually small but the rates of interest can be comparatively higher. Should you fail to pay your loan, the interest can keep accumulating.

Instant loans

Instant loans can be equally as convenient however are usually paid back over a longer period of time – therefore giving the customer a much more flexible loan. They are not provided by a corner payday loan shop. Instead, they are usually provided by financial companies, some with years of experience and a great track record. Also, it might be necessary for you to search for lenders, which offer a quick and easy process to get instant loans in Canada (or wherever you are). Instant loans can be repaid in instalments which makes them far easier on your pocket. The rate of interest can also be much more affordable.

Which one should you choose?

Ultimately, everyone’s situation differs, and each person should choose the option which is best suited to their needs.

Instant loans are increasing in popularity, with many providers now issuing funds on the same day, and with the option to spread out repayments over a number of months rather than weeks, many consumers are choosing this option for the short term financing needs. Paying $1,000 back in 3 to 6 installments can be far easier than paying it all back with your next paycheck.

Instant loans are can be helpful for those looking for quick funding to meet emergency needs. However, we must suggest that depending on either instant loans or payday loans to supplement your regular income could land you in financial difficulty and these loans are not designed for frequent, long-term borrowing. We recommend our readers to be mindful while making important financial decisions. No loan, whether taken from a bank or an instant loan provider, can be considered productive if you become habitual of taking it every now and then.

Remember, one small mistake today could limit you financially for years to come. So be careful and only take loans when necessary.