Not All Loans
Are Created Equal
We want to make sure you feel comfortable before
committing to one of our installment loans, so we’re
here to give you a full download on what you can
expect – and what your other options are.
What Is a Loan?
Understanding loans shouldn’t be all that hard. You take some money, you return some money, that’s roughly it, right? So why does the vocabulary of the loan industry sometimes feel like it’s meant to be as confusing as possible?
To make sure you feel comfortable in your financial choices, let’s break down the language around borrowing.
Loan –
A sum of money you receive from a personal acquaintance or a financial institution that is given with the expectation that it will be returned at a later date – typically, with a little extra on top
Principal –
The amount that you are borrowing
Interest –
The extra amount you will have to pay for the convenience of being loaned money
Term –
The length of time you have to repay the loan amount in full
Installment –
A repayment of a partial portion of the loan amount
Revolving Credit –
Allows you to borrow more as you pay off portions of existing debt
Fixed Credit –
Requires you to pay your balance in full before borrowing more
Secured Loan –
Backed by a physical asset, like a house or a car, that can be revoked in the event of non-payment
Unsecured Loan –
Not backed by a physical asset, but whether they are not repaid or has the potential to influence your credit score
Pre-Payment Penalty –
Some lenders do not like the idea of you paying off a long-term loan quicker than anticipated because they lose out on the amount of interest they will get. Because of this, they may charge this added cost for paying back your loan ahead of time.
Balloon Payment –
Another way to discourage people from paying off their loans faster, balloon payments usually require the final payment in a series of installments to be more than 2x larger than previous installments.
What kind of loans are out there?
If you’re looking for a loan, you’ll have a few options to consider, some more specialized than others. Here’s how they stack up.
| Loan Type | Interest Rate | Typical Term | Secured/Unsecured | Rate Type |
|---|---|---|---|---|
| Personal Loan | 10% – 100% | 2 – 24 months | Unsecured | Fixed |
| Payday Loan | 300% – 700% | 2+ weeks | Unsecured | Fixed |
| Credit Card | 13% – 26% | 1 month | Unsecured | Revolving |
Why choose a small personal loan?
Personal, payday, and credit card loans are all common options for borrowing money with few restrictions on how to spend it, but a personal loan may offer the best balance of accessibility and reasonable repayment terms for your situation.
Moderate
Most applicants receive pre-approval up to a set amount in just minutes.
Up to $1,760
Borrow only what you need with loans as small as $500 or as large as $1,760.
Variable
Repay your loan in small installments or get it done fast to minimize interest – we work on your schedule.
Moderate
Though higher percentage-wise than mortgage or student loans, personal loans’ relatively low principal amounts equate to manageable interest in dollar terms.
Small Personal Loans vs. Payday Loans
The terms make all the difference! Check out this side by side comparison to see why a personal loan is a better fit for those conscious about their budget.
Personal Loan via LendMobile
- Allow access to cash in just minutes
- Have a convenient web application process
- Can be used for anything
- Have much lower interest rates than payday loans
- Allow for early repayment with zero pre-payment penalties
- Never trap borrowers with balloon payments
- Help you build a positive credit score
- Calculate personalized pre-approval amounts to ensure the highest chances of full, timely repayment
- Make it easy to consolidate debt
- Eliminate the need for collateral
- May poorly impact credit history if not repaid
- Only amounts up to $1,760 can be borrowed
Payday Loan
- Allow access to cash in just minutes
- Only require ID and a bank account to apply
- Often have web application process
- Can be used for anything
- Interest rates are the highest in the industry – around 400%
- Typically have a balloon payment to keep you trapped in a debt cycle longer
- Debts often end up being ‘rolled over’ from one loan to the next, increasing out-of-pocket costs
- Lack of pre-approval limit leads to harder time paying back loans
- Don’t help you build credit
