A few years ago, people had to wait until they were paid their salaries or wages to cater to their financial needs. If they encountered problems before the paychecks came in, they had to borrow from other people or apply for a bank loan. With time, a lot has changed, and you can now access online payday loans that are deposited into your account almost instantly.
Online payday loans come in handy when you are financially stuck and in need of quick cash. This article presents an in-depth comparison between traditional payday loans and online payday loans, with a verdict on whether they are better than the other.
Traditional Payday Loans
Most people have encountered traditional payday loans and are familiar with the process as the concept has been around longer than online payday loans. To access them, you have to visit a physical location where an application is made on paper and go back with the money.
Rules and regulations of being a lender vary from one state or location to the next. There are restrictions on the highest amount to charge as interest and other fees applied in the process. Before accessing the loans, you have to pay an application fee of up to $100 or more, depending on the amount you need to borrow. This makes them more expensive compared to other types of loans.
Online Payday Loans
Online payday loans are easy to acquire through different digital platforms. These loans don’t check your credit, meaning that you can get the money regardless of how poor your score might be. The application and money acquisition process is quick and straightforward, ensuring you get the money as soon as you need it.
The main features of online payday loans include quick cash accessibility, short repayment periods, and a limited amount of money. You can get the cash in your account within a short period after application, making them convenient for emergencies. However, these loans attract hefty fees, charges, and overall interest and are more expensive than loans from other financial institutions.
When you cannot pay back on the stipulated time, you can request a loan rollover and have an extension. However, you will have to pay additional fees to compensate for this delay. Since online platforms don’t incur overhead costs like running a physical facility, their interest rates are lower than traditional payday lenders.
They are also more flexible with better customer service. They accept your applications and give you emergency cash loans no credit check, sorting out your immediate financial needs.
Differences between Traditional Loans and Online Payday Loans
The main difference between online and traditional paydays is the application mode. When seeking a loan from traditional lenders, you have to avail yourself in their physical offices, while online payday loans are accessible through your smartphone or devices.
The application period differs in both cases, with traditional payday loans taking longer to fill out and get approved. On the other hand, online payday platforms approve your loan within minutes.
Online payday loans charges are lower than traditional payday loans in terms of interest rates and other fees. The latter charges higher to compensate for the overhead costs incurred when operating a physical business.
You’re also guaranteed friendly customer service, ready to assist whenever you need help on online payday platforms. On the contrary, you may encounter bad service from the customer care attendants at the traditional payday lenders’ offices. There’s also likely to be a delay in getting these services.
When to Consider Online Loans
Online payday platforms offer financial solutions for borrowers in need of quick cash. It’s also ideal for those with a bad credit score and unable to access other traditional loans.
If you’re stuck in a financial problem that needs quick cash to evade, online payday loans save you the struggle of visiting traditional lenders who may be located far from your premises. Online platforms are user-friendly, quick to approve your loan request, and deposit funds into your account as soon as the process is complete.
Things To Remember:
Before settling for a payday loan offered online, you must consider the following:
- Some platforms add extra charges for late loan repayments.
- You may incur additional hidden fees that you were unaware of during the loan application.
- Consider more about a lender than the interest rates they charge. Some hide essential information in the blueprints or terms and conditions section.
- Ensure you’re capable of repaying the loan before applying for one.
- Understand the state laws and regulations surrounding payday loans borrowing.
- Check your credit scores to know the most suitable platform to apply for a loan.
Final Verdict
Regardless of your preference between online payday and traditional payday loans, you must compare the pros and cons for both, helping you select the most suitable one for your requirements. Check the difference in interest rates and other fees to know which is more affordable and easier to repay.
Online payday has the upper hand over traditional lenders due to the lower rates, consideration for low credit score borrowers, and the loan acquisition process speed.