Payday Loan vs. Personal Loan: Knowing the Good Choice.

If you are experiencing problems budgeting your salary to last until your next payday, then no need to worry about that. We all have those moments when we need to divert for a while from our strict budget plan. It could either be for the sake of pampering ourselves with best buys or unexpected expenses. Some of these may be on medical assistance, repairs or replacements. When these time comes you might think there are only few options that you could choose from. But think again. Who is the most trusted partner when it comes to your financial needs? That’s right! Your loan provider. And what do they offer in that type of situation? Correct! A payday Loan and a personal loan.

Now the problem is, which from these two are better? You know for a fact that both are helpful for short term financial needs. Some of which are bills for electricity, rent and maintenance for medications. Various loan providers have different policies when it comes to Payday Loan and Personal Loans. But they do share the same intention, and that is to assist you in your financial problems.

01 In terms of Collateral

Payday Loan requires you to leave a post-dated check with the loan provider for the amount borrowed with an addition of financing fees. Your loan provider will simply convert the check into cash when your payday comes. While for Personal loans, collaterals are not required, thus these are unsecured loans. Your loan provider does not have any hold from your personal belongings. This makes Personal loans quite attractive compared to Payday loans.

02 In terms of Credit Report

Since Personal loans are unsecured the only thing your loan provider have to make sure they don’t end up having bad debts is your credit report. They will have a close look upon your credit scores. From there, they would analyse if you are still capable of paying your loan or not. On the other hand, you will experience credit-report-check-free from Payday loans. This is because your post-dated check is already a form of payment from what you have borrowed. If you do not want to be hassled by having your credit report checked, then payday loan will be suitable for you.

03 In terms of Occupation

One good basis on choosing between a Payday loan and a Personal loan is your occupation. If you are employed, then your best option would be for Payday loans. This way, you can just present you post-dated check as a collateral without the hassle of your credit report being checked. However, if you are not into employment and an entrepreneur, then Personal loans will be appropriate for you. Since you cannot present any post-dated check from employment, might as well take Personal loan for your short term financial needs. As it can be costly if taken out for a long term loan instead.

In the end it would still depend upon your situation on choosing between a Payday loan and a Personal loan. Just keep in mind that if not managed properly, either of the two can still get you in trouble. That is, if you end up owing your financial provider more than what you are capable to pay for. In choosing a loan that is suitable for you, there is only one thing that you must remember. You must first know all that there is to know about the lending service. The next is to know how much exactly your income will allow you to loan. You don’t want to end up with a loan that is not payable by your income right? That will certainly help you in knowing the good choice.