Home Money & Finance Key Factors to Consider When Taking a Personal or Same Day Loan

Key Factors to Consider When Taking a Personal or Same Day Loan

by Olufisayo
personal loan

For someone new to the world of money lending, the concept of same day loans and personal loans can be a little confusing. Irrespective of how similar they may seem; there are some primary differences to be kept in mind to make the right choice. For instance, the same day loan is easy to get approved and is credited the same day of application; however, personal loans take some time for approval and have a longer repayment tenure.

When not properly addressed, loans can take several months to pay off and cause extra stress. Therefore, here are some points to will help you select the right short term loan for you.

personal loan

The basics of payday and personal loan

  • A Personal loan

A loan taken out for purposes such as a wedding, purchase of a vehicle or home or clearing a big medical bill is known as the personal loan. One can contact the banks for taking personal credit, and even though the interest rate is low and fixed in most of the cases, it can be risky for the lenders as there is no collateral involved in the dealings. There are other lenders as well who might offer you online loans which can be paid back in quickly. One of the important factors which compel people to opt for a personal loan is its positive influence on your credit score.

  • A Same day loan

A Same day loan or a payday loan is a popular variety of loans in Australia which are renowned for instant access to the required funds. You can easily find a trusted lender online who will approve your desired amount and transfer the sum to your bank account within 24 hours. Such loans typically run till the date of your next paycheck and are supposed to be cleared in full in one go for ease of your mind and pocket. These loans are taken to deal with a temporary emergency crisis where the amount is transferred irrespective of your earning capacity. The drawback that comes along with payday loans is the high rate of interest which be a bummer for many.

The critical points to consider

  • How urgent is the requirement?

While personal loans take a few days to examine your documents and application and provide the final approval, the payday loan lenders believe in instant cash relief. The application in the latter case is approved within 24 hours, and the required sum is credited to the bank account within the same period as well, thus making it a better option.

  • How big is the requirement?

Even though payday loans offer quick assistance, this question can turn the tables. For instance, if you need emergency cash assistance to buy a piece of jewellery or to cover your everyday necessities when you change jobs till you get your next paycheck, then a payday loan is the perfect option for you. However, if it’s a wedding that you need to sponsor or you are planning a lavish vacation and need great funds for it instantly, then personal loans will work best for you.

  • What is your pay back capacity?

A professional who earns well and has a good repayment capacity including high-interest rates, both payday loan and personal loan options are at this persons disposal which allows this person to choose from several loan options. However, if you earn a low wage and are in need of money which you prefer to pay monthly in small portions, opting for a personal loan will be a wiser option.

  • Which is a safer option?

When thinking about payday loans, the interest rate is usually higher. That being said, if you delay the payment, you will be charged a significantly higher rate until you finally repay the whole amount. So, you need to consider your payback options when taking out a short term loan.  However, opting for a normal personal loan with a bank could result in you getting knocked back.

Before you sign any contracts and get a loan, keep an open mind and think of all the aspects carefully before taking the final leap. Good luck!

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