We live in a time where the economy all around the world is in a really bad place, and as the paychecks are going down and the prices are going up, it is pretty difficult to be able to afford even the most basic things. We are all in need of some extra money every month, and until we find a better job or until we find other solutions, we need to borrow some cash and make it to the end of the month. Getting funds from the people around you is always an option, but what happens if they cannot provide that financial support? In that case, we are forced to choose some of the official lenders and get some additional income until we are able to get back to our feet. Here, we are going to talk to you about the two most popular options nowadays, the payday and the personal loan. Keep on reading to find out if one is a better alternative to the other.
What are personal loans?
Let’s first talk about personal funding and what it will help you with. Right from the start, you should know that this is an option that is great for people who need financial support that does not exceed five digits, but that is still greater than just three digits.
If you choose this type of loan, you can usually borrow anywhere between one thousand dollars and up to 30, 40, and even 50 thousand dollars. The minimum and the maximum that you can get depend mostly on the lender, but your finances and current state will also play a huge role in that.
You will have several years to pay this loan back, and you won’t have to rush and collect cash until your next paycheck. This type of funding is great for those who need to get a slightly bigger sum, and those who need it for more than just groceries or paying the bills.
You can use this funding to remodel your home, purchase a new vehicle, or you can just store the cash in case you are in between two jobs and need to make sure that your family will not be left without a roof over their heads.
This type of funding usually comes with an APR of between 5 and 35 percent, and your credit will need to be checked. You cannot get the funding without getting approved, and you may even be declined if your score is not to the point where it should be.
What are payday loans?
Now let’s see what payday loans are and what you need to pay attention to when choosing to get them. They are a great option for those who need cash as soon as possible, those who don’t want to wait to get approved, or individuals who don’t need to borrow a large sum of money.
Most people choose to borrow less than 500 dollars, even though some lenders will let you get up to one or two thousand dollars. This is a great option for individuals who just need to patch things up for the month, and who need to pay their due bills or purchase something that they don’t need every single month.
When it comes to how much time you would be given to pay it back, it is usually several weeks, but depending on the service that you choose to collaborate with, you may get an extension and you may be given one or two months to pay the cash back. With services such as SpeedyCash, you can get up to 1500 dollars right away and you can talk to the lender about how much time you would be given to pay it all back.
The best thing about this type of service is that you won’t need to have a perfect credit score, and your account will not be checked before you get approved. Most people who apply will be approved within 24 hours, and possibly even less than that.
Keep in mind that since this option is available for everyone and your credit report will not be affected by it, the APR is pretty high. You should expect numbers up to 400 percent, and you need to be aware that you will need to give back a lot more than you initially borrowed. If you don’t think that you can keep up with this, you should seek other options.
Which one is better?
As you can see, both of these fundings are similar, but they are definitely not the same. If you are looking for fast cash, and if you don’t want to be bothered about what your credit score is, then you should definitely go with the payday loans. Nevertheless, if you don’t want to face the extremely high APR and if you don’t want to pay that much in fees, then a personal loan is the best alternative.
Make sure that you understand that you will need to take out more cash with the personal loan, and you won’t be able to pay it back right away. You will need to accept that years will pass until you close that loan, and it may affect other borrowings and mortgages that you have.
Both of these options come with their positive sides, as well as their disadvantages. There is no formula that fits everyone, and it is difficult to say that one is better than the other. You need to think about your exact case as well as your specific needs, and if you are not sure which one is the right way to go, then you can talk to a financial advisor and see what they have to say about this.
In any case, keep in mind that the service that you choose is going to affect your whole experience, as some services will give you better conditions and will ask you to pay back lesser fees, while others may put you in a worse financial state than you already are. Because of this, do really deep research on what is available in your location, and don’t go with the first lender that you come across. Compare options, see what is going to be the best way forward for you, and know that once you make the final decision, you will have to accept both the good and the bad that come with it.