Many people prefer payday loans to short term loans simply because they are fast, easy and convenient. Currently, more people borrow from payday loans than to short term bank loans. The big question is, which loan is more convenient and why?
Let’s compare the two
The length of repayment
Typically, repaying short term loans will take longer than repaying a payday loan payment. Most payday loans require a full repayment within a month, or up to three months depending on the terms given by the lender. With short term loans, you can take a few years depending on the amount given to you by the lender.
You can choose to pay a monthly r yearly plan with short term loans, given that the two options are provided. Normally, most lenders have options to pay the amount plus interest in monthly instalments. Most lenders make repayments directly from your bank account immediately you receive your check. It is deducted before you get full access to your income. With payday loans, the amount is to be paid weekly, daily, or full loan and interest as long as you beat the deadline. The lender has no access to the funds so you automatically pay the loan yourself
Anybody can get a payday loan; the qualifications are not that strict. All you need is a valid national ID card or driver’s licence to prove you are a citizen, a bank account where they can deposit the funds, and some may require a proof of income. You do not have to be employed to apply for a payday loan. Getting a short term loan can be difficult; you need an id, proof of income, employer’s contacts, credit score, collateral, and a lot more personal information to be considered for a loan. Even then, the lender may reject your application for a loan if they feel you are unfit and you can’t make the payments on time.
Loan application process
The loans application process is easy when it comes to payday loans. All you have to do is visit a website form your phone or computer. The next is to create an account with your details and from there you can access the loan application page.
With short term loans, you have to travel to the physical location of the lender, like a bank, with all the required documentation. You will go through the terms and requirements with a representatives sent by the lenders, provide the documentation and wait for feedback. It can take a few days or weeks.
Credit score check
Before they give you a short term loan, lenders check your credit card history and scores. If you have a poor score, you will get minimal or no loan. a good credit card score increases the amount of money the lenders are willing to loan you. Payday loan lenders do not check your scores when giving you a loan. a bad credit score does not make a difference in the amount of money you receive
In terms of speed and convenience, payday loans take the lead but when it comes to interest rates and length of payments, short term bank loans will always win. It all comes down the purpose of the loan and how much you need.