If you’re interested in taking out a personal loan it’s important to know the different types available to you so you can make the most educated choice for your lifestyle. 

There are two basic categories of personal loans – open-end and closed-end credit. 


Open-end credit 

Open-end credit, or revolving credit, is typically used on a recurring basis for everyday purchases or bigger ticket items like plane tickets, car rentals, and travel accommodations. This type of borrowing is typically paid back on a monthly basis, either in full or in minimum installments. The most common type of open-end credit is a credit card. However, home equity loans and home equity lines of credit are also included in this category. 


Closed-end credit

More commonly called an installment loan, closed-end credit is typically used to finance something for a specific purpose and is expected to be paid back in a pre-arranged, agreed-upon amount of time. Payments are usually made on a monthly basis that includes an interest charge. The APR rate set for each installment loan depends on the borrower’s credit score and varies by lender. 

Some examples of installment loans are: 

  • Mortgages
  • Car loans
  • Vacation loans
  • Payday loans

Though you can apply for an installment loan through a bank, an increasingly popular way of taking out an installment loan is online. 

However, there’s a catch. Not all installment loans are created equal. 

Cash Advance | Cash Loans

Watch out for cash advance payday loans

This type of personal loan goes by a number of names – cash advance, check advance, payday loan, or cash advance payday loan. Payday loans are easy to get, either in brick-and-mortar stores or online. While this is intriguing for many consumers, the problem with this type of short-term personal loan is that it charges a very high-interest rate along with hidden fees based on a borrower’s credit profile and income. The loan’s principal is typically borrowed against the customer’s next paycheck. 


Ever consider an online personal loan with Leap Credit? 

There are many reputable online lenders out there if you’re looking for a simple and fast short-term loan experience. If you’re approved for a Leap Credit loan, your money is automatically deposited into your bank account within as little as two business days. 

If you choose to take out a loan through Leap Credit, you have the peace of mind knowing that:

  • There are no hidden fees
  • You pay simple interest, not compounding
  • The loan process is fully automated
  • You get faster access to your funds
  • We are state-licensed and are in compliance with state regulations

If you’d like more information about taking out a personal loan with Leap Credit, check out our terms and rates page to see if Leap Credit is available in your state. You can also call (888) 532-7842 or email us at [email protected]. Next time you need money fast, consider Leap Credit!