Which Loan to Choose - Traditional or Payday Loan?
Do you have hesitations in terms of choosing a payday loan or a traditional loan? As a matter of fact, the answer to the question depends on the purpose you need a loan for. If you want to buy a car, surely you need to go for a conventional loan. In case your car needs some repair works and you lack a certain sum of money to get it done, a payday loan is the right choice for you.
Let's have a look at the core differences between traditional long term loans and short term payday loans. First of all, let's discuss the main features of the so called traditional loans.
Requirements and approval process
- Visit the office of the lender to discuss your situation.
- Complete the application form and pay an application fee.
- Submit extensive financial data to your lender.
- The lender performs a credit history check and verifies your employment status.
- Wait for a couple of weeks till the lender makes the decision.
- In case of approval wait for around a week to receive your check.
- Fees and low interests are charged.
- You have about 12-57 months for the repayment.
So if you are planning to buy a car or want to repair your house, the long term loan is what you need.
Now it's time to know the details about the payday loan requirements and approval procedure.
- Apply online at home or in the office without indicating the reason you need the money for.
- Answer simple questions in an application form.
- No need to submit any documents to the lender. Applicants should not be younger than 18 and should have a stable regular income. Borrowers should be citizens of the USA and need to have an active checking or savings account.
- Loan qualification is performed without checking your credit history.
- Instant approval - just in a few minutes. In fact, 99% of applicants get their loans approved.
- The money is transferred to your account on the same business day.
- Payday loan lenders charge higher interest rates. The typical fee is about $25 for every $100 borrowed.
- You need to repay the loan on the day when you get your next paycheck.
Thus if your car needs quick repair and your paycheck is still a long way to go, you should opt for payday loans online.
***Here is a very detailed report about payday loans from Federal Reserve Bank of St. Louis Payday Loans: Time for Review - for more information and convenience in taking a loan decision.