Many people have misconceptions surrounding loan options. They think that personal and payday loans are just the same thing or they are very much similar. Well, it is not the case. They are quite different from each other.
While personal loans are generally for large amounts that can be paid back in instalments over longer time duration. On the other hand, payday loans are short term loans that are secured against your next pay-check. Apart from the main differences, there are some other differences too between these two loan options. Let us check them out in the following section!
The repayment period for personal loan range from few months to even a year. On the other hand, payday loans carry the repayment periods that range from few days to a week. Payday loans normally allow borrowers that can’t repay their loans in full to renew loans at end of each of the pay period through making token payment covering portion of interest on loan.
Loan processing period
Payday loans are normally processed quickly, but the personal loans may need few days or even some weeks to process. Since payday loans are approved within minute and loans are disbursed the same or the next business day, they can be a great option for the borrowers that are facing any kind of urgent situation. If you are facing any medical emergency or any such financial emergency, waiting over a week for personal loan is definitely not desirable option. Some of the best lending firms including Swift Money same day loans can often deposit your funds into your account within couple of minutes. No waiting till next day!
Most of the leading options that you will find will normally require a credit check to see your overall credit history and your credit score. Personal loans often require stringent credit checks. For many people having bad credit, no collateral and no co-signers, payday lenders usually represent few borrowing options remaining. It is mostly because these lenders don’t perform conventional credit check. Instead, the borrowers are denied or approved for most part, on the basis of whether they have or not have verified income.
Payday lenders don’t typically perform credit check before they offer a loan. They are even not required by law to report any such information back to credit bureaus about any of the loan that you receive.
Benefits and features of payday loans over personal loans
- Same day loans are available without any kind of credit check.
- Unsecured personal loan.
- Same day or payday loans help you to meet your emergency financial requirements.
- You can easily apply for it online.
- It is quite safe and secure and it maintains complete transparency.
- Best for borrowing small amounts of money.
- They involve minimum documentation and less paperwork.
- Don’t require collateral.
It is possible that sometimes in our life we may need immediate cash for emergency. In such situation, a payday or same day cash loans can be the best option.