Installment loans are a type of loan that you repay through regular, monthly payments. Unlike pay day and title loans, they don’t require a single lump-sum payment that many borrowers can’t afford. Installment loans spread out the cost, making them a more affordable alternative for many borrowers. Understand the facts and risks of different types of loans before you commit. United Finance offers traditional installment loans and has loan officers available at every location to discuss your needs.
Traditional loans with fixed monthly payments and fixed terms.
Car Title loan or title pawn are also terms used for these short term, typically higher interest loans that the lender holds the auto title.
A payday loan is a short-term, typically higher interest loan marketed as a way to borrow money fast. You’re supposed to repay it by the time you get your next paycheck (hence the name “payday loan”). These loans are often categorized as “predatory” and “debt traps” with default rates much higher than traditional loans.
Installment loans vs. title loans and payday loans
Title and payday loans are commonly defined as loans for a small amount of money and for a short time. You pay the lender a fee to borrow the money which can be very expensive and often translates into much higher interest rates than a traditional installment loan. You usually have to repay the loan in 30 days. These loans are often categorized as “predatory” and “debt traps” with default rates much higher than traditional loans.
Traditional installment lenders work with you to determine a loan amount and payment that fits your budget. The lender will ask you to complete a credit application and review your credit report. The lender considers many aspects of your financial situation to help determine if the loan is a good fit for you. Installment loans have much lower interest and default rates than pay day and title loans.