Payday Loan Or Bank Loan? How To Decide Which Is The Better Option For You
What option is better for you? Is it a payday loan from a local lender or a bank loan from a nearby bank? When you’re looking for loan options out there, it may be overwhelming having countless places and choices you could possibly acquire a loan through.
you may need to get a loan quickly and haven’t yet decided if you’d prefer to get a short-term fast loan or a personal bank loan. Both have their time and place. That’s why you can consider the differences between them as well as all aspects of your situation carefully – and only then decide which would suit you better.
The Key Similarity
A South Carolina payday loan and a bank loan are both unsecured loans. You won’t need to put up an asset as collateral for either a payday loan or a personal bank loan. This means you’re not risking your personal property acquiring either, even in the worst-case scenario.
That’s pretty much where similarities end and differences start.
The Differences Between A Payday Loan And A Bank Loan
1. The Maximum Loan Amount
An emergency payday loan is designed for short-term use. It’s usually only a few hundred dollars at max. At Carolina Payday Loans, Inc. you can get up to $550 and the sum is typically paid off at once – on your next payday.
A bank loan, on the other hand, could be much larger, and the repayment period can last up to 7 years.
2. The Influence Of Your Credit Score
Your chances of getting approved for a bank loan – especially one with favorable terms – are intrinsically linked to your credit score. The better the credit score, the higher the bank’s confidence that you’re a trustworthy borrower, and thus the higher the chances that you will get approved for the loan and that you’ll get favorable terms, like lower interest rates.
Your chances of getting a payday loan, however, aren’t much affected by your credit situation at all. You can get approved for a payday loan not only if your credit is average – but even if you have bad credit. This makes it much more accessible, especially for those who need assistance fast.
3. Reporting To Credit Agencies
If you want to get a loan to build up your credit history then a payday loan will be of no help. They don’t get reported to credit bureaus so they cannot influence your credit in any way.
A bank loan, on the other hand, does show up on the credit report. As such it runs a risk of negatively influencing your credit if you’re unable to keep up with the payments for some reason. It will improve your score if you make your payments on time.
To put it in simple terms: if you wish to keep your loan fully private, then a payday loan would serve you well. If you need it to build up your credit history – then you would need to get a bank loan.
4. The Speed Of The Loan Process
Getting a payday loan is all in all much more accessible and faster than getting a bank loan. If a bank isn’t fully satisfied with your credit situation, your income source, or anything else, you might need to go through a more complicated assessment process which could take from a few days up to several weeks. And then you’d have to wait a few more days before you get the money if you get approved.
On the other hand, the entire process of getting approved for a payday loan takes less than a day. And the list of requirements is much shorter. For example, here at Carolina Payday Loan, Inc., you’d need:
- A government-issued ID (to prove you’re over 18).
- Proof of income (typically your most recent pay stub but can be an alternative source as well).
- A blank check from an active checking account in your name.
How To Acquire A Loan Today
The process for acquiring a bank loan can be different from one bank to another, so it’s always best to get in touch with your bank to find out more.
However, if you only need a few hundred dollars to tide you over before your next paycheck, you may find the help you need in a payday loan. Here is you can qualify for one by the end of today:
- Fill out and submit the cash loan SC form.
- Answer your phone when the loan representative contacts you soon after with further instructions. They will provide you with further instructions, inform you of the requirements, and schedule an appointment with you.
- You can also ask any questions you may have about the loan (ex. what documents you’ll need for proof of income if you’re unemployed).
- Take the required items to the meeting the loan representative schedules.
- Let the associate assess your documents to determine if you qualify.
- If approved – you can finish the paperwork and get the money on the same day or the following business day!
Finding The Loan Option That Works Best For you
A payday loan and a bank loan both have their time and place. A bank loan would work if you had a larger expense or big purchase to make but they’re overall harder to acquire as your eligibility would heavily depend on your credit history and income situation.
A payday loan might be better suited for situations you need quick cash. Emergencies like unexpected doctor’s visits, car repairs, or unplanned travel would serve as good examples. You can also get the process started right now from the comfort of your home by submitting the online form today.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.