Personal Loans vs. Payday Loans
Which One Is Right for You?
If you find yourself in a situation where you need money, and the only way to get cash is to borrow from a lending institution, your next thought will be—“Should I get a personal loan or a payday loan?”
To determine which type of loan is right for you, ask yourself these questions:
• What do I need the money for?
• How long will I need it?
• How quickly do I need it?
A payday loan is usually for smaller amounts of money to help you through a short-term cash crisis. You can think of it as a bridge loan to yourself—borrowing only until you receive your next paycheck.
There is no credit check* involved with a cash advance loan, and no collateral is required. The only requirements are regular employment and a bank account. You are charged financing fees for the loan, but they are often in the form of an up-front, flat fee. If you repay when scheduled—usually your next paycheck—then your commitment to the loan is done.
And payday loans are quick and easy. Applying for and receiving the loan are usually done in less than 48 hours.
Choose the Right Financial Tool
Both personal and payday loans can be excellent tools for managing your personal finances. Which one you need depends on several factors. Educate yourself on the differences, assess your needs, and choose the right loan for you.
*Lenders typically will not perform credit checks with the three major credit reporting bureaus: Equifax, Experian or Trans Union. However, Credit checks or consumer reports may be obtained by some lenders.