Are Payday Loans Quicker than Bank Loans? | Newsroom 24

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Are Payday Loans Quicker than Bank Loans?

Article by Vincent Rogers

A payday loan is usually for only a few hundred pounds. The amount that you will be approved for is based on your pay check. This is because this is the amount with which the loan will be repaid. They are typically used for emergencies and unexpected expenses that crop up between paydays. For example, a bill comes due before you get paid or a car repair is necessary. The payday loan can be used to cover these expenses if you do not have a savings account or another means of obtaining the cash needed.

The payday loan can usually be obtained in a maximum of two days, depending upon where you apply for the loan. Often they are accessible within a few hours. This is one of the reasons a payday loan will cost more in interest than a bank loan. It is a short-term loan that does not have as many restrictions as a bank loan.

A bank loan usually takes a couple of weeks for approval and can take longer. They are not designed for emergencies when cash is needed right away. A bank loan is better suited for planned needs for extra money. If you are planning to replace a worn out appliance or you need a new car rather than repairing the old one, a bank loan would be your best option.

In addition, a bank loan will require a good credit score. The bank will obtain a credit score before making a decision as to whether to loan the money requested. If your credit score is not within their guidelines, it is likely that you will be turned down for a loan. A payday loan company does not look at the credit score of the person requesting the loan. Their main concern is that you have a job with a steady income and that it is verifiable.

Additionally, they usually require a checking or savings account from which the money borrowed, plus interest can be debited. If you will notice when shopping for payday loans there are many companies that advertise 24/7 service. This is not possible with a bank loan. The paperwork involved in a bank loan is extensive and then you will have to meet with a loan officer who will ask many questions about why the money is needed.

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