Tag: loans

Personal Loans vs. Payday Loans

Payday loans and personal loans may seem similar but there are some marked differences that set them apart. These two loan types represent different approaches to obtain extra cash in terms of loan period, loan size, qualification, and cost. These loans are great for paying for purchases or expenses you may be unable to afford. This article will help you understand the differences between payday loans and personal loans.

Personal Loans

Personal loans are different from car or mortgage loan as they do not require any collateral. So if you fail to pay back the loan, the bank can directly seize your assets. Typically, personal loans take days to process and you will need to provide documents such as bank accounts, tax returns, pay stubs, and so on. The bank will also evaluate the borrower’s income, credit score, wealth, expenses, and other factors. The interest rate on this loan range from 12 to 30% although you can get lower or higher rates depending on your credit score and other factors they may deem fit.

Pros

Lower Interest Rates

When compared to payday loans, personal loans have lost interest rates. This makes them the better option when you need some handy cash.

Consolidate your Credit Card Debt

You can use personal loans to consolidate your credit card debt since they charge lower interest rates than credit cards. This can be an opportunity to repay your debt faster.

Cons

Longer Approval Process

The approval process of personal loans is usually slightly longer. This is because the loan provider needs to evaluate all the borrower’s documents which can take several days.

High Interest Rates than Some Credit Cards

This depends largely on your credit score, you may be better off with those credit cards that offer 0% introductory APR on purchases for a given period if you are looking for extra cash to make big purchases.

Payday Loans

Payday loans are high interest, short term loans that you must repay on your next payday. They are designed to help employed individuals bridge temporary cash shortages. To set an initial credit limit, most payday lenders will evaluate your employment income and bank account. This can rise with time if you maintain a good record with the lender. Like personal loans, you don’t need collateral or a good credit rating to secure this loan. See more!

Pros

No Credit History Needed

Even with a bad credit score rating, you can get a payday loan.

Small Loan Amount

You can get a loan of a few gifted dollars with payday loans unlike personal loans that are of higher amounts.

Cons

Higher Interest Rates

The average interest rate on a payday loan is 15% which is significantly higher.

You can get Trapped in a Cycle of Debt

You are more likely to get additional loans after your first one. The interest rate can too 1,000% when you renew your loans or get additional loans.

Typically, personal loans are cheaper than payday loans. Personal loans are perfect for those who need a substantial amount, have a credit rating, and can afford to repay the loan installmentally. Payday loans are perfect for those with poor or no credit history but need money in a hurry. Check out this site: https://en.wikipedia.org/wiki/Payday_loan

The 4 Types of Short Term Loans Every Business Owner Should Know

Short term loans are often vital for the success of business owners around the world. Businesses are in constant need of cash and while some are lucky to have a seemingly endless supply of cash available to them, many do not. However, most business owners don’t want a long term loan hanging over their heads especially in this day and age when the economy isn’t at its best. Short term loans are the more common option and there are lots of loans to consider as well. However, the following are four types of short term loans you need to know as a business owner.

Go To a Short Term Loan Lender for a Small Loan

If you’re issues are that you only need a few hundred dollars to get you through to next month then you might be best suited to short term loans. There are lots of types of short term loans but a back to basic loan from a regular lender can be a viable option. With these loans you can get a loan between a few hundred and thousand dollars and then within a matter of say four weeks to twelve weeks you can repay. Depending on the amount you borrow the payoff time can be increased.

Invoice Financing

You might not have heard of invoice financing and yet it’s really a common type of short term loan for businesses today. Essentially while you are waiting for an invoice to be paid to you, you can find your business a little short and that can cause the daily running of the business to slow down or even come to a complete halt. You don’t want this but with invoice funding you can go to a short term loan lender and borrow potentially ninety percent of the total cost on the invoice. When you are paid the outstanding loan is paid. It’s really a simple loan. More details.

A Business Credit Card

Lines of credit are useful and they are essentially a short term loan albeit in a card form. How it works here is that you have a line of credit say from a retailer to purchase your stock and when you sell that stock you will repay the retailer. If you have a business credit card you charge money onto that card and you will repay the amount borrowed at the end of the month or over the course of several months. With any short term loans there will be some interest attached but usually not at an extremely high rate so it’s more manageable.

A Merchant Cash Advance

Some people think cash advances aren’t loans but if you actually think about it they are! Cash advances are offering you the cash up front so that when you need it its available, it’s a loan plain and simple. This can be a great short term loan option and there are many good lenders to choose from as well. When you’re looking for a short term loan lender why not think about a merchant cash advance, it’s a smart option.

Know What Financial Options Are Available

Far too many business owners aren’t aware of what financial options are available and when the time calls for them they fail to choose a suitable avenue. It’s easily done and something which more and more people are doing on a daily basis. The trouble is that if you don’t know what financial options are available you don’t know where to start. It’s important to know what Short term loans routes are available so that when the time comes you can know what to look into. Check out this site: https://www.loanpig.co.uk/short-term-loan-direct-lender/ …