What is the difference between payday loan and bank loan?

 

Taking a loan is a responsible and binding decision. In most cases, we precede the decision to start a loan commitment with a fairly thorough consideration of this issue. Similarly, financial institutions reserve the right to thoroughly check information about us, i.e. a potential borrower, before they grant us any credit. But what if we need cash and cash basically right away.

Payday loans – quick loan

Payday loans - quick loan

The situation, when we need a quick loan in cash, contrary to appearances, is not necessarily so rare. All you need is an unforeseen expense or need for financial support from our loved ones and it may turn out that even if our financial situation is not bad, it is because of, for example, a previous loan or poor credit history that the bank will not grant us a loan. What to do in this situation? The answer is obvious – you can take a loan in the form of so-called payday loans.

Ranking of payday loans

Ranking of payday loans

Many myths have arisen around the payday loans, which continue to do so today. Many of these myths actually had a real foundation at a time when the short-term loan market was “wild”. Currently, its rules are regulated and we can feel safe. However, before you decide to take a loan, it is good to have a look at the payday loans ranking.
Ranking of payday loans can tell us where to get a loan at a lower percentage or where there are milder guidelines for repayment.

How are payday loans different from bank loans?

How are payday loans different from bank loans?

To understand the difference between a bank loan and payday loan, it is worth looking at this topic from the perspective of a financial institution. A bank loan is a long-term investment. Usually the interest rate is definitely lower than the payday loan, repayment is stretched in time and the borrower is thoroughly checked. The loan is usually also granted for a significant amount. All this means that a bank loan has a low risk. The instantaneous payday loan is granted for a short period without checking the borrower too much. For this reason, it is a high-risk activity, and in addition, short repayment times and low amounts, impose a high interest rate so that lending pays off.


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