Installment loan and payday loans – advantages and disadvantages.

A well-known saying is that each medal has two sides. It is similar with almost every thing in the world. Nothing is perfect, every product or service must have both pros and cons. This is exactly the way it is in the financial market, specifically in the loan industry. What pros and cons can we see in the offers of non-bank companies? Check!

More and more Poles use the offer of non-bank institutions. For some, quick financial support is one way to mend the household budget, for others the last resort. Assistance is granted in many cases without certificates and detailed scans of your credit history. Few, however, think about the benefits but also the dangers of contracting this type of commitment.

Payday loans and installments – loans over the Internet

Payday loans and installments - loans over the Internet

Traditional loans have become an impregnable product for many of our countrymen. All because of the need for adequate creditworthiness. People who cannot count on the bank’s help turn to loan companies. These institutions are constantly expanding their offer. So-called payday loans and online installment loans are becoming more and more popular. Their characteristic features include the lack of numerous formalities, high flexibility in the amount selection and the loan period, as well as the speed at which they are granted.

Advantages and disadvantages of loans

Advantages and disadvantages of loans

Each good or service has advantages and disadvantages. In this text we will make this type of summary on the example of short-term liabilities and installment loans. The mechanism for granting both by specific entities is almost the same. Companies take into account our credit history, current financial situation, and most provide full electronic support.

Advantages of short-term loans

Advantages of short-term loans

On the plus side of payday loans, you can certainly put the rapid process of granting them. Most loan companies do everything online. In addition, financial institutions limit formalities to the minimum necessary. An important aspect of this type of support is the lack of detailed control of the borrower. We are talking here about all debtors’ bases. The customer also does not have to provide employment or income certification. Many cash donors offer a free first payday loan. This means that the customer returns exactly as much as he has borrowed. No interest, hidden fees or additional conditions to be met.Payday loans and creditworthiness

When it comes to short-term loans, companies provide support even to those who cannot boast good financial condition. This is a huge advantage of payday loans. Therefore, they are mainly used by people without a permanent job and remuneration. A large group of borrowers are also clients with poor credit history. Among them there are many debtors who have other outstanding debts.

Disadvantages of traditional payday loans

Disadvantages of traditional payday loans

The main shortcoming of this type of financial support is the short repayment period. The instant granting of payday loans is connected with a loan term of several or several dozen days. By default, it is a maximum of 30 days, rarely 45 or even 60. Another disadvantage of payday loans is the possibility of borrowing a small amount, up to several thousand zlotys.

Installment loans in Monocred

Installment loans in Monedo

An online installment loan is the second type of support offered by non-bank institutions. One of the most popular companies providing this service is Monocred Now. It borrows from 1500 to even 10,000 $ for a period of 6 to 24 months. It is enough to be at least 18 years old, have Polish citizenship, a valid ID card and be a bank account holder. Monocred installment loan is also very popular among those in debt. The institution approaches each case individually. Checks its clients in the database of debtors, but does not delete any at the start.

How to apply for a loan in Monocred?

How to apply for a loan in Monedo?

The matter is very simple. Just go to the company’s website. Use the sliders to select the total loan amount and monthly installment that suits you. On this basis, the system will generate a preliminary proposal, including the loan period. If this solution suits us, you must submit an application. You will need basic personal and contact details. Monocred Now issues its decision within a few minutes. After signing and sending the contract, the institution will send money to our account.

Advantages of installment loans

Advantages of installment loans

An online installment loan meets the needs of a large number of clients for several reasons. First of all, it is a great alternative to traditional bank loans. It differs from them in that it is granted on less restrictive terms. The speed of completing all formalities plays a big role. What makes them different from ordinary payday loans? By being granted for a longer period, you can apply for a higher amount. The repayment is naturally divided into monthly installments. The loan term is up to several years. It is a convenient solution for borrowers who have other, not necessarily financial, obligations and need money “for”.

Internet loans not for everyone?

Internet loans not for everyone?

In the case of installment commitments, the borrower’s financial condition is taken into account much more than for payday loans. Higher amounts for a longer loan period require meeting several formal conditions. For example, we are talking about the need to provide a certificate of employment or income. The companies also verify their clients in the database of debtors such as BIG, BIG or KRD.

Online installment loan – disadvantages

Online installment loan - disadvantages

In the case of traditional payday loans, you can find the “first loan for free” opportunity. In practice, this means that the borrower gives back as much money as the company has given him. There is no interest or additional costs here. This solution is not an option when you apply for an installment loan. Any form of support in this area is associated with costs, often quite high. The main disadvantage of installment loans is therefore the large total cost of the liability.

Thorough loan analysis

Thorough loan analysis

It all depends, however, on which company we choose. The choice is wide and with a longer analysis you can find a really attractive proposition. What does it look like in Monocred Now ?

A representative example is as follows: loan amount = $ 3,580, interest = $ 678, commission = $ 2,614, total = $ 6873, interest rate = 6.3%, average Annual Annual Interest Rate = 108%, period = 23 months, minimum period = 6 months, maximum period = 24 months. The minimum APRC depending on the term of the loan is 43%, the highest in turn 152%.

Internet loans – summary

Internet loans - summary

There is no perfect solution in the world of loans. Each of them has its pros and cons. It is worth analyzing each decision regarding contracting a commitment. It is important that the type of loan is tailored to the borrower’s needs and expectations. An online loan in installments and popular payday loans is a good solution for people who are certain that they will be able to pay off their liabilities. The customer has a choice between a smaller amount, which he will almost certainly receive, and a higher support, which he will pay back for many months.

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