As per a survey conducted by CNBC, a large number of the American population is one crisis away from unplanned debt. The survey further revealed that around 60 percent of Americans could not afford an unexpected $1000 expense without borrowing money.
However, this problem of cash crunch is not only limited to Americans. Almost every working man in this world is going through the same problem. Many of you must depend on the banking system to avail that extra cash in the time of need. Still, when it comes to serious money problems, it can be stressful to figure out what type of financial solution is right for your situation.
Recently, payday loan companies have made a name for themselves in the world of money lending services. Payday loans have long been a go-to for those who are interested in immediate cash to deal with an emergency. This is generally true for those individuals, whose bank accounts are always running low on cash or with no access to credit cards. Yet, what is the difference between payday loans and traditional loans, and why are more people are shifting towards payday loans? Which one is better and why? Here we discuss some of the chief pointers.
Payday loans vs. traditional bank loans: what is the difference?
Payday loans, too fall into the category of installment loans, but their lifespan is much shorter than the traditional bank loans. However, the interest rate is higher and the borrowed amount is much smaller. In case you still do not understand the concept, learn more on online payday loans at spacecoastdaily.com, and get all your answers. A payday money lender is not interested in your credit score history, the only thing they are interested in knowing is that you have a stable job, which you can confirm easily with your previous salary statements.
Traditional loans, also known as installment loans, come with many terms that vary, depending on the type of loan you are looking for. The terms are typically for months or even years. You get a lump sum which you have to pay back to the financial institution in fixed monthly installments, including interest over the lifespan of the loan. Installments loans always require a credit check and a lengthy application process.
The application procedure involved in payday loan confirmation is minimal and you get your asked amount within hours in your bank account. This is why payday loans are hugely growing in popularity.
When you find yourself stuck in a serious situation with little or no cash at your disposal, a payday loan company can provide you with quick cash. However, if you apply for a loan in a financial institution it may only add up to your problems.
On the other hand, a payday loan company strives to provide you fast services, whereas the banking system takes a lot of your time and energy to get your loan amount approved. This is one of the many reasons why a payday loan company can be a better option to choose when it comes to an emergency.