The concept of payday loans rests on a simple fact that a borrower can repay a debt when one gets paid again. Payday loans were designed as very short term financial assistance to take care of minor personal expenses or unexpected financial liability. The original payday loan has only one repayment term. It is one month or less. The exact date of repayment is thus the payday, when a borrower gets the next paycheck. Payday installment loans do not work in the same way. However, there are similarities.
Payday installment loans can have a repayment term of two months up to a year. It is unusual for lenders to offer more than twelve months for full repayment. Since there is no onetime repayment, the date does not have to correspond to the next payday. The dates for repayment can be the same every month, depending on the day when the loan was approved and disbursed. So a loan taken out on the fifth is due on the fifth every month through the whole term of repayment. This date may not be a payday for a borrower. The borrower could get paid on any other day but the installment will be debited from their bank account on the date agreed upon as per the terms of the loan.
There is another key factor that should be noted to understand the correlation of payday installment loans and the exact date a borrower gets paid. Payday installment loans are available to self employed professionals and business owners. Anyone who can provide a proof of income can get a payday loan. But a self employed professional or a business owner does not have the typical payday. Their incomes are in the form of revenue. Lenders usually go for the same date every month throughout the term. The borrower knows it and makes sure there is enough fund in the account for the auto debit to go through. The original concept of payday loans has been tweaked substantially over the years. Payday installment loans are now more like unsecured short term loans.
Paychecks or the date when a borrower gets paid may not have anything to do with payday installment loans but income and employment, self employment or business remain quintessential factors. It is also unlikely for a lender to agree to a date proposed by a borrower. Lenders will pick the dates as per their policies.