Showdown: Personal Installment Loans vs. Credit Cards

Showdown: Personal Installment Loans vs. Credit Cards

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What type of financing should I use?

There are times when there are things you need to pay for quickly, but just do not have the cash on hand. When that happens, personal installment loans and credit cards are two options for financing – but it is important to know the difference.

Great for one-time expenses : Personal Installment Loans

A personal installment loan is a one time cash loan that is deposited directly into your bank account. You then pay the full amount back within a month to six weeks, in small payments. Personal installment loans are great because they have a fixed cost that you can work into your short-term budget. Often, personal installment loans require only a simple credit check, can be applied for securely online, and the money will be deposited into your bank account fast.

Good for dire emergencies: Credit Cards

Credit cards are good to have on hand for when dire emergencies arise and you need access to money right away. It is important to remember that the interest rate on credit cards compound, meaning that unless you pay the balance off quickly, you will end up paying more than you had expected. When you need access to immediate cash and can afford to pay it off before the interest acrues at the end of the month, a credit card could be your best option.

When you are faced with a need for quick cash, credit cards and personal installment loans can both be very useful. Personal installment loans offer a limited amount of cash deposited directly into your bank account that you can pay off in small increments, while a credit card offers you financing that accrues interest after the fact until it gets paid off. When you are in need of quick cash, make sure you choose the type of financing that fits your situation the best.

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