Payday advance vs. Personal loan

June 22, 2010 - PRLog -- Faced with a cash crisis, one tends to think of only two options – either borrow from friends and relatives or approach the bank for a loan. While borrowing is embarrassing, banks may not be willing to extend you loans if you want a very small amount, if you want it in a tearing hurry and if you have bad credit history.

The other option is to go for a payday loan. But is that a good option? Let’s compare personal loan with payday loan a bit more closely:

Time of approval

It takes anywhere between 3 days to 10 days for the approval in case of personal loan while payday advance is approved within minutes of applying.

Ease of processing

You would need to furnish whole lot of documents such as income proof, identity proof, residence proof etc. to apply for personal loan. In case of payday loans, no documentation is necessary. All you need to have is a regular job, a valid bank account with a debit card and you must be over 18 years old.

You can apply on phone or online from the comforts of your home or office. Not even faxing of documents is required for online payday loans.

Credit history

There is no way you can get personal loan if your credit history is not up to the mark. On the other hand, credit history is no criteria for approval of payday advance. Thus for people with adverse credit rating, payday loan is the only option of borrowing money.

Tenure

The tenure of personal loan is longer (from 1 year to 3 or 4 years) while payday loans are very short term loans, lasting till about your next payday.

Interest rate

Annual interest rates for payday loans are on the higher side but since loan tenure is very short, actual interest paid does not amount to much.

Amount of loan

Amount granted is higher in case of personal loans.

Repayment

Personal loans are repaid through Equated Monthly Installments (EMIs) over the tenure of the loan. Once the agreement is in place, it becomes very difficult to alter repayment schedule. While in case of payday advance, repayment can very easily be deferred by some weeks after paying a certain amount of fees.

From above discussion it is clear that if you want monetary help on an urgent basis there is no better option than payday advance. TopPayDay.co.uk understands your requirements very clearly as we have helped over 1, 00,000 people since 2003. With us you can avail loan up to 750 £ within 24 hrs.

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