Are Payday Loans Better Than Short Term Loans?

payday loan comparison

Are Payday Loans Better Than Short Term Loans?

Payday loans and short term loans have very similar properties, consequences, and meanings. However, there are countless differences between the two to be considered. Yes, both short term loans and payday loans are ways in which you can borrow a small amount of money and repay it over a short period of time. But, overall, the two are very different. There is no right or wrong answer to which kind of loan is better, the conclusion is created from personal preference and individual opinions. Therefore, that is why it is so important to do all of the necessary research before submitting any applications or borrowing the loan itself. Even if you are in an emergency, it is still essential to take all of the necessary steps.

Payday Loans

Payday loans are small sums of money that a consumer borrows from a lender and repays with their next wage. They are extremely helpful to those who just need an immediate emergency boost of money in order to help economically. Despite being such a risk, these loans offer a quick rescue to those facing any worries. Due to the short time range of the loan itself, the amount is always on the lower side. Unless the borrower is able to comfortably afford the repayment, If this wasn’t the case, more consumers would often opt for a short term loan.

Short Term Loans

A short term loan is also a small sum of money, often ranging from £50-£1500. When borrowing a short term loan, consumers usually repay the amount over a period of up to 12 months. This gives borrowers the ability to flex and comfortably repay the amount with minimal stress and concern over repayments. As the loan range is low, consumers will only have to repay small amounts every month, keeping a lower cost.

The idea of choosing which loan is most beneficial will depend on your personal finances and your reason for borrowing. If you want a small loan, and you are borrowing towards the higher end of the range, it may be easier to manage a short term loan. However, if you are only borrowing a small amount, you may wish for the process to be over sooner, instead of being attached for 12 months. There are many more pros and cons to both kinds, for more information click here.