When you needed financial support, and you firmly decided to turn to the services of financial organizations, it remains only to decide: which is better – a bank loan or a payday loan. This will be discussed in this article. According to statistics, most citizens have ever resorted to the services of banks or quick loan services. Nevertheless, most people do not understand the principles of lending, and also have false ideas about these products of the financial market. So, what is more profitable – a bank loan or a loan to payday?
There is no need to explain what a bank loan is: you go to the bank and sign a loan agreement, according to which the banking institution gives you a certain amount of money, and you undertake to return them at a specific date and pay interest on the loan.
It is advisable to take a loan in a bank when a fairly large sum is needed. Banks have standard requirements for the borrower and a large package of documents for the loan. The bank may require security in the form of a pledge or surety, especially if the borrower has a dangerous job (from the bank’s point of view), or his health is at risk.
Loan agreements with the bank are always very detailed, but you can skip important information about penalties, commissions, etc. Also, banks, protecting themselves from the risk of non-return of money, may refuse to grant a loan to a person with a bad credit history and also in the case if its absence.
Loans to payday are given by special financial organizations as well with interest. It seems to be all the same, but how to understand what is more profitable?
If you need a small amount of money for a short period, it is definitely worth choosing a small loan to payday, like 400 dollar loan from 400loan.com. The interest rate is higher, but due to a short loan term you end up paying much less. Requirements for the borrower are softer and you need far fewer documents. The contract is often represented by an offer – an electronic agreement. However, you can safely know that you will pay the amount that you learned when you made the loan. A person can expect to receive a loan with bad credit.
Also, a personal presence of the borrower is necessary for processing a loan in a banking institution – banks can not make an application by phone or on the website. All this is associated with time costs and, of course, emotional costs. Whereas to conclude an agreement on the same online loan, it is enough to have a device with Internet access to leave the application online.
Thus, answering the question what is more profitable, we can sum up that in those cases when money is needed urgently, and the amount is small, it is better to take advantage of a payday loan. If you need large expenses, and if you have enough time, you can apply for a loan in a bank.