Are Guaranteed Payday Loans Bad Credit Better than Installment Loans for Bad Credit?

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Prior to deciding the type of loans that are better, it is important for interested borrowers to take their individual situations into account. Both guaranteed payday loans bad credit and bad credit installment loans can turn out to be advantageous for the borrowers.

However, there are the loans that are advantageous and legitimate while there are others that have a major impact and drag the borrowers into a circle of their very own debts.

Knowing the Differences is Important

Installment loans and payday loans for bad credit are generally known as small-pounds and high-cost financing options. This is due to the fact that these loans generally come with high rates of interest.

The high rates of interest on these loans are basically because the borrowers generally have low-income or bad credit. Therefore, such borrowers are considered subprime borrowers. These borrowers generally do not have access to the affordable credit options such as home equity and credit cards. Some differences between payday loans and installment loans for bad credit have been detailed below:

• Bad credit payday loans are the loans that can either be small or big. They are generally short term loans that need to be repaid within a time span of 30 days and even less. These loans are set up by post-dating checks or through automatic withdrawals once the paycheck of the borrower is deposited into his or her bank account.

• Bad credit installment loans come with finance, interest and principal charges including fees and insurance. The entire amount needs to be repaid by the borrower in monthly installments. The installments of such loans are fixed and the APRs are quite high.

It is always a wise idea to avail the services of a reputable and experienced broker when it comes to getting any of the above mentioned loans. This is because brokers make it easier for the borrowers to meet the eligibility conditions for such loans.