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Payday Loan vs Traditional Bank Loan

Got into situation where you need more money? The obvious choice would to borrow money either from friends, relative, bank or even payday instant loan. The last two options comes handy if earlier doesn’t work.

Traditional bank loan and Payday instant loan are basically two different type of lending loan. Below we briefly discuss both of them:-

Traditional Bank Loan:

Lend loan from bank can be hectic sometimes due the long processing time and filling of numerous forms. After application approval if further takes week (even months) to transfer money. Hence, if you are looking for quick money then bank loan is not your answer.

Second most important thing to consider is your Credit Score, you should have good credit score in order to obtain bank loan. If you credit history is bad then simply forget about bank loan. Along with good credit score you also need to provide evidence that you have strong job and steady monthly income.

After credit score you need to consider the amount you want to borrow. Bank usually used to lend loan of larger amounts and you get ample time to return back the loan money. Based on your application & borrowed amount, bank may extend your returning period upto years.

Payday instant loan:

Payday also involves filling of forms and other data, but these are relatively simpler than processing a bank application. Once you application is approved then you receive loan amount instantly which is transferred to your bank account.

You don’t need credit score – yes this is the interesting part. You don’t need any credit score, all you need to provide the evidence that you got good job and steady monthly income, that it. Payday loan companies are more interesting if you can pay loan back rather than you credit score.

Unlike banks, you cannot borrow larger amount. Payday loans works only for small or medium amount start from few hundred to thousands only. Basically amount should be short enough which you can easily repay on your next pay day.

So Payday Instant and traditional bank loan both have their own pros and cons. But again only acquire loans if you really need it.

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Payday Loan Guide and Precautions

A payday load is an instant load which can be acquire in emergency situations. You simply need to fill some forms containing your social security number, bank details along with proof of your job. Once all information is provided and approved then you instantly received loan amount into your bank account directly.

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Following are few parameters should be considered before lending and paying the loan:-

Seeking best pricing and return rate:

Always consult or seek loan information from multiple lenders (at least 5), compare their pricing and lending terms. Every lender provides different type of terms and condition and few give discount if you pay them before due date. So gather your all options and choose your lender wisely.

Paying the loan amount back:

While taking loan also consider re-payment terms. Like any loan dealing business there comes penalty for late paying, now it depends on lender how much penalty they impose for late paying. You can repay them within one month but you may request them to extent the period upto six months as well.

The most common practice in payday loan is that you provide them with Bank Check with future date (date usually when your pay will be made and you will have sufficient amount in bank). If you are expecting any delays in repaying then you should inform them before due date reaches.

Choose professionals:

It is advised to choose professionals or companies instead of individual personnel without proper license. Professional companies has proper customer services and following proper channel to lend and deposit loan amount.

One other benefit is that you can contact your business bureau to cross-check the past for lending company. It will be helpful to see if they have clear record and no customer complaints whatsoever.

Precaution:

You should avoid lending payday loan in first place, only lend loan if there is some really emergency. Loan whether small or large comes with liability, so be careful.