Explained: Payday Loan vs. Short Term Loan vs. Instalment Loan

Have you ever wondered, what is the difference
between a Payday Loan, a Short Term Loan and an Instalment Loan? You’re not the only one. Even Google doesn’t
give a clear answer either. Well they’re all unsecured loans that vary in length. That’s
it! A Payday Loan normally refers to a loan that
you take out and pay back when you next get paid. A Short-term Loan is paid back within 12 months,
whereas an Instalment Loan could be any loan amount repaid over any period of up to 7 years. The good thing about LoanLineUK is you don’t
need to know the name of the loan you want, just how much you want to borrow and how long
you want to pay it back. The LoanLineUK system will work out which
one you are applying for and send on to those lenders who provide the type of loan you are
looking for. For those of you still wanting a more technical
answer, well… A Payday Loan was originally a loan that would be repaid in full by the
individual who took out the loan on their next payday. Normally within a month of the
loan being given. These loans were often paid back within 14 to 60 days. The confusion came
when some payday lenders advertised on TV they could offer longer term loans. Because
of this, the term payday loan can often be associated with loans up to 4 months. A short-term loan is the industry term for
loans from 2 to 12 months. These can vary quite dramatically in value from £100 up
to £1,500 and have small number of monthly repayments. Finally, an Instalment Loan can be repaid
over one year up to seven years in length, with monthly repayments. These loans are often
higher value and start from £1,000 and can go up to £25,000. For the large value loans
over £6,000 you’ll need to contact your bank and discuss what options they may have. For shorter term loans, those that are paid
from one to twelve months, it’s important to understand that interest is charged on
a daily capped rate. This means the longer you choose to repay the loan, it will often
lead to a larger, overall amount in total to be repaid. When choosing a loan and looking
what is best for you, it’s very important to firstly see how much you can afford to
repay each month and try to seek a loan that is affordable in the fewest possible payments. LoanLineUK takes away the uncertainty of knowing
which lenders can help with what type of loan you are looking for. Just one application
and it’s sent to multiple lenders on your behalf. If you are looking for a loan from
£100 to £2,500 try them for yourself at www.loanlineuk.net.

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