Get Quick Cash Relief by Applying for Payday Loans
As a matter of fact, numerous people think that payday loans and personal loans are similar but it is far from reality. These two however are totally different structures. Generally speaking, these payday loans are already secured to your next payday and available for short term basis. The payday lenders are very eager to offer this solution to their customer’s financial woes. These loans however come with bigger penalties and higher interests.
When it comes to personal loans however, they are available for a larger sum of money and mostly used for major financial issues which can be repaid for an installment basis. Reputable and well known lenders are offering both types of loans to assist you on your journey to fix your financial records.
Basically, there are many other things that made these loans are different from each.
Loan processing period – typically, payday loans are processed faster than personal loans which often requires days or two weeks at the most. Since payday loans are approved within minutes and that the loan is disbursed almost the next business day, they seem to be advantageous especially for borrowers who face urgent financial situation.
If you’re facing the possibility of having your phone service or electricity suspended the next day, then applying for a payday loan can provide a resolution to your problem.
Repayment period – personal loans are offering varied repayment periods for customers from months, years to two years. By contrast, the repayment period for a payday loan can last for only a week but some can extend to a maximum of 14 days.
Co-signer or collateral required – in most cases, personal loans are not looking for any collateral on the part of the borrower. On the other hand, some credit unions as well as banks may need borrowers especially those who got bad credit history to find a creditworthy cosigner. While collateral or cosigners aren’t required in payday loans, there are some lenders that are requiring borrowers to show references alongside their bank information and employment records at the same time.
There is the so-called title lenders in which the payday lender provides loans to people in exchange of their car or house title. Despite the fact the fact that the borrower has ownership to their house or car, the lender can still keep possession of it until they have paid the money borrowed in full. If they fail to make repayments of the amount, then that is when the borrower will lose his or her asset.