The Differences Between Payday Loans and Traditional Loans

Published on March 28th, 2014

When you need money, you may think that your only option is a traditional loan from a bank. Thankfully, there are quicker ways to get the money you need without having to spend time proving to a bank that you’ll make payments on your loan. In fact, loans that don’t require tons of information or lots of time are the best. Payday loans are an easy solution to money problems, allowing you to borrow off your paycheck before you get paid.

You can usually take out what you need to pay some bills, pay down a medical bill, or provide a friend or family member with some quick cash for their needs. While you can still refinance or take out a traditional loan, here are some differences between the two types to consider before you make a decision.

Payday Loans Use Your Paycheck

Rather than borrowing a large sum of money from the lender that will take you years to repay, the best payday loans give you just what you need financially with the ability to repay the sum within a month. The lender will automatically deduct what you owe from your checking account within 30 days, allowing you to get the cash you need and repay the debt with your next paycheck.

Traditional Loans Have Stricter Requirements.

If you have a job and a bank account, most likely you’ll qualify for a payday loan. With a traditional loan, you need to submit proof of income, tax forms, possibly references, and personal documents to the bank. You may or may not get approved based on the information you provide, and it can take weeks before you hear whether or not you qualify to receive a loan. With payday loans, you often have a qualification within 24-hours and have the money immediately upon approval.

Short Term Loans Are Convenient

The best payday loans offer convenience. You don’t need to wait days or weeks for approval, and you don’t need to make appointments to speak with a lender. You can even apply for a Short Term Loansshort-term loan online, making the process of getting the money you need much easier. Applicants with bad credit often get turned down at traditional lenders, but since repayment isn’t based on your credit history even those with bad credit can get the money they need.

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