Payday Loans Vs Personal Finance Loan: A Look At The Differences

Running low on funds at one point or another is just a fact of life for most consumers. Whether it is the need to pay for unexpected travel expenses or a need for cash to carry you through until payday, these situations just happen. Thankfully, when you need cash and you need it fast, there are payday express companies that can help. But why would you go to a payday express lender and not just get a personal finance loan? Take a look at the common differentiating factors between the two lenders to help you understand which direction you should take. 

Finance companies will consider your credit history, but payday lenders usually don't. 

When you go to a finance company to get a loan, there is almost a positive guarantee that your credit history will be pulled and your score will be a heavy determining factor as to whether or not you get the loan. On the other hand, payday lenders most often do not use your credit history at all to determine that you can have a loan. Instead, they require basic things, like a bank account, steady employment, and proof of identification and possibly your address. 

Payday lenders do not ask for collateral for a personal loan, but finance companies often do. 

In order to obtain personal funding at a finance company, you will often be required to have some tangible property that you can sign over as collateral. This could be anything from a piece of valuable property to a vehicle, which means just getting collateral lined up can take a lot of time. Payday lenders don't require collateral for their short term loans. They do require that you leave with them a check that can be cashed once your loan becomes due for repayment. 

Finance companies may need a co-borrower, but payday express lenders don't. 

If you have poor credit history and nothing that you can put up for collateral to obtain a personal loan with a finance company, they will often require that you have a co-borrower or co-signer for the loan. This person will be signing to say they agree to be responsible for repayment if you don't pay. It can be difficult to find people willing to co-borrow or co-sign on a personal loan, and even if you can, finding a loan may not be a matter that you want to share with other people. Payday express companies do not have this option and your loan will be your own personal matter. 

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