There is no shortage when it comes to the different types of loans available. Whatever be your need, there is almost some type of loan available that can help you meet that particular need. Take speedy payday loans, for example. These loans are great options when you need money for a short period of time. On the other hand, they are not the only kind of loan that provides a similar type of service.
Due to the wide variety of options available, it can become difficult to make your choice. In order to simplify things, here is a basic comparison among the most common types of loans you can choose from.
Payday Loans
Also known as payday lending, these loans are named because they are meant to be repaid by the next payday of the individual. These loans are not offered by banks. Instead, they are given out by loan agencies, institutions and even pawn shops. Here are some of the features of these Speedy Payday Loans.
- Payday lending involves a small sum of money. $350 is the average amount of money lent out to people in these loans.
- The process of getting such a loan is very easy. All you need to do is make the application process and submit a few documents.
- The repayment period is short. Two weeks is the average.
- The money is handed over in a matter of minutes or a few hours at most. The speed with which the money can be received is one of the advantages.
- These loans are provided irrespective of the credit rating. In fact, the lenders do not check the credit rating nor does the loan affect it.
- The charges and interests for these loans tend to be quite high. As a result, some people may find themselves in a cycle of debt unknowingly.
- Speedy online loans are a possibility here but care must be taken to ensure payday authenticity of the lending institution.
Personal Loans
These loans are provided by banks to individuals who need to money for a personal purpose. There are other places from which such loans can be hand. Irrespective of the source, it is important that all the aspects of the deal are checked out including the source to prevent a problem.
- These loans generally deal in amounts of money larger than what payday lending institutions give out. A few thousand is the minimum for these loans.
- The time required to get money through this loan can be quite long as there are the verification and approval processes to consider.
- The credit rating is a major factor in getting this loan. Most banks will not approve such a loan if the credit rating is poor. In some cases, the fees charged will be higher if the credit rating is bad. If you are unable to pay back this loan within the mentioned time, your credit rating will drop further.
- The term for personal loans can be short but never as short as payday speedy online loans.
- The charges and interests for personal loans are much lower than payday loans
Credit Cards
Credit cards have become hugely popular due to the conveniences they can bring. As a result, most people forget that they are also a kind of loan from their banks. While selecting a credit card, a number of things will have to be checked so that you get the best deal.
- The credit rating is very important when applying for a credit card. Failure to make the designated card payments can lower the rating drastically.
- On the other hand, credit cards can be used for all sorts of payments, big and small. The limits are only determined by the credit limit of the card.
- The charges applicable for credit cards are quite high. Only in a few cases, they are lower than payday loans.
- The repayment time of credit cards is monthly and the amounts are rolled over in case the payments are not made. As a result, the debt can quickly increase if not taken care of.
- It is easy to fall into a cycle of debt if a credit card is being used.
Whatever be your choice of loan, you must make sure that you have done the proper research. There are many unscrupulous institutions out there. Therefore, make sure you know everything before entering into a deal.