Personal Loans vs Payday Loans: What’s the Difference?

Personal Loans vs Payday Loans: What’s the Difference?

Lady Talking in Mobile and Holding Laptop with Another HandIf you’re like most modern consumers, you’ve experienced cash flow issues every now and then — and you probably know all too well how financial issues often cause a domino effect that can have a significant impact on your life. For instance, unexpected vehicle breakdowns may cause loss of hours at work, and in worst case scenarios, you might even lose your job. The same dynamic applies with utility shutoffs. Companies generally charge a huge deposit if they have to shut off your utilities for nonpayment, meaning that the family has to make tough choices about priorities. How have you handled these situations in the past, and what would you do differently now?

Personal Loan vs Payday Loan

The vast majority of people have had to borrow money at some point in their lives to get them through a financial mishap. Payday loans and personal loans are among the most popular options, and both have their individual advantages and drawbacks, and many people are unclear about what is the difference between a personal loan and a payday loan. Both are unsecured, interest-bearing loans that are repaid according to a schedule that was agreed upon at the time of issue, and both can be paid off in full at any time. However, those who compare personal loans vs payday loans discover that major differences exist.

What is a Personal Loan

A personal loan is an unsecured loan that is issued by a bank or a credit union. These usually take a bit longer to be approved than the typical payday loan, which makes them a less than ideal option for those needing fast cash in order to effectively deal with an emergency situation. Personal loans have lower interest rates, higher ceilings, and longer payback periods than payday loans, however, which makes them good choices for high-ticket projects such as home improvements where you don’t need the money right away. However, interest rates on these can be high as well if you don’t have very good credit, so it pays to shop around for the best rates. Credit unions often have more lenient lending requirements than traditional banks.

What is a Payday Loan

A payday loan is a short-term loan that generally carries a higher interest rate than a personal loan, and if the loan isn’t paid off within the specified time frame, you may accrue extra costs such as finance charges. Because payday loans involve short-term contracts, they typically aren’t issued for large amounts, so they aren’t really meant for covering large expenses. Most people use payday loan services for unexpected emergencies.

Payday loans work for a variety of scenarios. One of their main advantages is that they’re quick, and this can help the domino effect mentioned earlier from becoming a part of the picture. A necessary vehicle repair or payment on a utility bill can keep the situation from escalating into something far worse, and even though higher-than-normal interest rates apply, sometimes it’s the less expensive option if it can prevent further financial losses.

Although payday loan companies don’t check your FICO score, they do ascertain your employment status and other sources of income as well as require you to submit your checking account information.

Why Choose Money 4 You Payday Loans in Utah

There are so many advantages of choosing  Money 4 You Payday Loans!

  • We offer loans from $50 to $3,000 dollars with a flexible payment schedule!
  • Our application process is simple. All you need is proof of your state-issued photo ID, proof of social security number, a checking account that you’ve had for at least 1 month, and a job you’ve had for at least 1 month.
  • We offer quick approval with same day cash.
  • Our rates are the lowest around.
  • We have 21 convenient locations in Utah.

For those circumstances when it seems that a payday loan is the better option, please feel free to contact our lending experts at Money 4 You Payday Loans for more information on what type of loan is a payday loan. You can start your application process online or visit one of our many locations in Utah. With over 25 years of experience in the lending industry, we’re committed to friendly customer service and transparent lending policies

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