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Short Term vs Payday Loan

Short term vs payday loans are two main options for almost every American with a desire to borrow extra funds. One more advantage is the repayment period: pay it back as fast as possible. The main difference between short-term and payday loans lies in the number of repayments you have made.

Кelatively speaking, a borrower usually pays off a payday loan within a month or two from the moment you issue extra funds – in equal payments. When you issue a short-term loan, you could pay your obligations off from 2 months to a year.

The application process difference between short-term vs payday loans?

If you plan to issue short-term loan or a payday one, the application process is really similar. Meet the following requirements to qualify for both types of loans:

  • the age over 18;
  • a US resident;
  • open a bank account and/or you have a debit card from which they can withdraw your repayments;
  • you’ve got a job for 90 days consistently;
  • an active mobile phone the lenders can contact you on.

Some of the lenders may ask you to provide any certificates confirming your payment capacity. Usually, lenders are not intent on connecting your employer that’s why you are not about worrying you won’t be approved for any kind of financial products.

Will a client wait longer for a short-term lending option to be deposited?

Both loans are created to cover you in urgent obligations. Such options should not be issued month after month because any delay in repayment will cause big problem and spoil your credit history.

You may spend the borrowed funds on:

  • car breakage;
  • utility bills;
  • delays in paycheck;
  • job changing;
  • medical expenses;
  • funeral expenses.

Sum up

Short term and payday loans are distinctive by flexibility and speed. They are effecient in emergencies. Depending on the chosen lender, you could even save on interest by paying the loan off early. You also don’t have to secure any surety against them like your home or your car.

What to point out? There is not a great difference between short-term and payday loans. The lenders set the same requirements to qualify for them. You will be able to cope with urgent problems appeared.