Personal Vs. Payday Loans: Pros, Cons And More!

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When you are in a financial situation and in dire need of cash, the last thing you would want is to run after a loan manager. If you are employed and have legal, stable income, you can go for a personal loan or a payday loan. Both are different in certain ways, and in this post, we will talk of the pros, cons and other aspects.

Quick basics

A payday loan is usually repaid on the next payday of the borrower, while personal loans can have longer terms, usually between one to five years, depending on the terms and conditions. In terms of funding, you can expect to get sums up to £2000, based on your income, nature of loan and other details.

Requirements at a glance

Payday and personal loans are unsecured loans, so you don’t have to place a collateral. However, these loans are secured against the income of the borrower. So, you must have a legal job with a stable income with relevant papers. You must be 18 years of age and should have an active UK bank account, where the funds can be deposited when the loan is approved. There are websites like www.luckyloans.co.uk/, which simplifies the whole process, so that you can get same-day approval online. Funds are usually deposited within a day, and in many cases, within 15 minutes of approval.

Why go for short-term loans?

Usually, lenders are just interested in knowing if you can repay a loan in the first place. The purpose of taking the loan doesn’t really matter, and you can use the funds for almost anything, which is a big advantage. Without no collateral, your personal assets are safe, and if you don’t go for a strict payday loan, you can even repay the loan in installments. In short, short-term loans offer you the flexibility to make the most of the funds approved, without being coaxed into many clauses. With that said, note that the rate of interest is considerably high on these loans, and therefore, you must be ready to repay the principal with the interest as per the terms on time.

Repaying payday and personal loans is also very easy. The money will be automatically deducted from your bank account as per the instructions. It is highly recommended that you avoid the delays to the best possible extent, because it can increase the costs and charges, which can be pretty high.