Payday loans vs. traditional personal loans: who wins

We often need extra cash to cover emergency expenses. Perhaps you received a medical bill that you cannot pay. On the other hand, maybe you need to pay for your car repair immediately. In these urgent situations, requesting a loan can be of great help. However, not all loans are the same. When you need the money quickly, you can apply for either a personal loan or a payday loan from Red Payday. They both give you money for your personal expenses, but they are different in many important ways.

Points to highlight

The differences between the two are significant, and can make a huge difference in the amount you pay in the end. Payday loans offer fast money in exchange for high interest rates and fees. However, experts suggest applying to one if there is no other option, because it is short repayment periods and high APRs cause most borrowers to be stuck in a long cycle of very expensive debt.

Personal loans are generally less expensive and easier to pay off on time. They are also offered in various amounts so you can borrow the amount you need. Suppose that for whatever reason you cannot afford this month’s rent and you need $ 400, fast. Therefore, you decide to apply for a payday loan. Unlike a bank loan, most payday lenders charge you a flat fee when you take out a loan.

Criteria explained

Payday loans give you money for your personal expenses. You can use your payday loan to pay for almost anything. The main attraction of payday loans is that they are easy to qualify for anytime. All you need is to be 18 years old or more, have a valid ID, a bank account, and permanent employment. Whether you have bad credit or no credit, you are regularly approved for a payday loan.

Explanation of personal loans

Now that we have explained how payday loans work, let us look at personal loans. A personal loan is an amount of money that you borrow for your personal expenses. You can use it for things like home improvements, car repairs, emergencies, medical bills, large purchases, or to pay your family and friends. To take a personal loan you must have a credit score. However, in case with payday loans, this score does not matter. In case with personal loans, you must have a score between 300 and 850. Check out various options  of  lån til Oppussing – Søk hos 15 Banker med 1 Søknad! It often come with fixed interest rates, fixed repayment terms, and fixed monthly payments.