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Payday loans are short-term loans that are typically due on your next payday. Wait for approval: The lender will review your application and determine whether you are approved for the online loan.

This means that if the loans borrower defaults on the loan, the lender can seize the collateral to recoup their losses. Overall, installment loans can be a useful financial tool for those who need to borrow a large sum of money and want to pay it back over a longer period of time.