Understanding The Difference Between Cash Installment Loans And Paycheck Advances

A cash installment loan, as the name implies, is paid back in several installments rather than one. It can be for a period spread over few weeks or months. The amount of cash advance generally varies from $750 to $1500. It depends upon factors such as your income level, state where you live and the status of your past credit payments. You pay back the advance in equal parts on dates as pre-decided in the agreement. The payment dates are made to coincide your paydays. Some companies offer these loans to even people on Social Security income or Disability.



Installment Loans



A cash installment loan spans a period that goes well beyond your next pay check day. It is paid off in a number of pre-agreed equal installments. The number and schedule of payments are pre-decided and depend on when you get paid. The loan money can be used for larger purchases as well as to cover emergency expenses. Expect the lender to employ tele-tracking to know your financial status. Tele tracking is a risk assessment service, which reports a customer's payment status to lenders.



Based on the available information, the payday lon company decides the loan amount, the schedule of pay back in parts and the interest cost. The interest cost is higher for smaller and short term loans, for example, $1.25 per day (456% APR) for every borrowed $100. For larger and longer term cash installment loans the interest cost can typically go down to $0.25 per day (91% APR) for each borrowed $100. These interest costs are only indicative and vary from lender to lender.



Personal Paycheck Advances



In contrast, a personal paycheck cash advance is just for a period until your next payday. It needs to be paid back fully from your next salary. It is a popular alternative to tackle costlier emergencies such as a likely check bounce or to prevent a late utility payment charge. As fast cash lending companies are not interested in your credit history, they do not tele-track your financial records. The cost of an online cash advance typically varies from $15 to $30 for every borrowed $100. In terms of annual percentage rate, these turn out to be 390% APR and 780% APR, respectively.



Cash installment loans are of bigger amounts with a longer payment schedule spread over several paydays. Unlike the personal paycheck loans, borrower's credit history has some bearing on the loan amount as well as the cost.



In short, with a cash installment loan you get more time and flexibility in terms of use and pay back compared to a fast cash advance.