If you need money for a specific purpose, unsecured loans offer many options. Some people turn to payday lenders to get the money they need, while others depend on quick small personal loan services. But what’s the difference between these two types of loans? Let’s look at both loans to see.
Payday Loan
Payday financing is designed to give the borrower a small amount of cash. In fact, most loans are no larger than one thousand dollars, although some can be larger. Most payday terms work like this:
- Application – you apply for financing from a payday lender. This is usually done online, and the process is relatively quick and easy.
- Terms – with most types of payday financing you pay the entire amount off in one lump sum. This is usually done on your next pay period, and that is where the term “payday loans” came from.
- Receive your money – your money is deposited directly into your bank account. There is no need to be concerned with check cashing issues.
- Payment options – the easiest way to pay back a payday loan is to have it taken from your checking or savings account.
Quick Small Personal Loan
Quick personal lending is not the same as taking out a payday loan. You go to the provider and fill out an application. The process is easy, and your provider will give you a list of all the available lending programs that you qualify for. Loans can be small or as large as five thousand dollars to one half million dollars.
What’s the Difference?
A quick small personal loan is amortized like most loans. You make monthly payments, and there is no loan collateral required for personal loans. With a fast personal loan, you have longer to pay it off, and larger amounts are available than with payday loans.