A personal loan takes at least a couple of days to be approved and sometimes people dont have that much time. This is true for example if cash for medicine is needed by a sudden accident or illness, a personal loan cannot solve this kind of problem but a payday loan can.
Payday loans do not require thorough credit checks or collateral which makes them very attractive for those who have bad credit or do not own a property. In fact, requirements for a payday loan are minimal; you just need to have a bank account and a job. Compared with all the requirements needed for applying for a personal loan, especially at banks, payday loans are a far more accessible financial option.
When time is an issue
When you dont have enough time, nothing compares to payday loans. No bank or lender could ever approve up to $2000 in less than 24 hours, the time needed to fill and approve all the paperwork required for a personal loan takes far more than that. Payday loan lenders, on the other hand, are used to process loan request within hours. There are few requirements to check and before you know you get the money transferred to your account.
A payday loan is usually due by the time your next paycheck arrives. So you dont have much time for repaying, nor have you, except in certain situations, the possibility to extend the repayment program. This loans are intended for an emergency situation, that being said, if you wont be able to repay the loan you should use the time you gain to get approved for a more flexible personal loan, repayable in installments.
Payday loans carry a high interest rate; this is due to the fact that there is a very high risk involved for the lender. The truth is that the lender lacks almost any guarantee that the borrower will be able to repay what he owes. To compensate this, he charges a high interest rate, and offers a short period of time for repayment.
Loan amounts are not high, usually the loan amount offered ranges between $500 and $1000. However, in certain cases you may be able to find lenders willing to lend up to $2000. But if you need more money than that, you will have no choice but to wait to get approved for a personal loan.
Great for those with Bad Credit
When you apply for a payday loan your credit report wont be pulled, so it doesnt matter if you have low credit. You just will have to offer proof of a job and provide your bank account number in order for the lender to transfer the funds.
There isnt much paperwork involved. In fact, there are fax-less payday loans offered on the net. The whole process is performed online. It isnt difficult to find these lenders, there are many sites offering access to lots of payday loan lenders so you can compare rates and see which lender best suits your needs.