Should You Choose a Bank Or a Payday Lender?
Most people have had at least some experience borrowing money from a bank in their lifetime. Some of those people may have been disappointed with the process and left without the money they needed.
Banks are very meticulous when it comes to checking your debt to income ratio, your credit history and score, and asking you the specific reason you need money. That can be time consuming and embarrassing!
Payday loans are quick, easy and very convenient and they might just be the right option for you, but in this article we can look at the difference between banks and payday lenders. Then you can decide which one will work better for you and your current situation.
Bank & Traditional Lending
First you have to inquire if the loan officer is available, and sometimes you have to make an appointment just to see them. If it is a loan, they want you to have a bank account with them to get a loan through them.
Then once that is out of the way, they ask you how much you want, how long you want it and what you need it for. Some people may just not be comfortable going into detail about the reason they need the loan.
They inform you of the interest rate, you give your work history, supply proof of income and major creditors. Then they need to double check all that information and get back with you in a day or two to give your decision of approval.
One situation that may arise is that you get the loan you asked for but because your credit was poor, you got a very high interest rate. Then there is the issue of having to go back into the location to sign the final paperwork, then have to wait for the check to process or the direct deposit.
Payday loans are actually much easier to avail. You walk into a facility, or find an online provider, and you tell them how much you want and the process begins there.
You decide on the term, which is usually short, show proof of identity, bank account and employment and you are on your way to getting your money in 24 hours or less! This is much more appealing.
They will explain their fees and interest to you, but a note on that — interest rates are very high when compared to a long term loan. These are short term loans so they are really not that much more expensive.
And paying for convenience is very valuable to people in a rush to get their hands on cash. The fees are usually a certain dollar amount for every $100 you borrow.
Payday lenders don’t usually run your credit, but if they do, their approval is not dictated by your report in most cases. In fact, people with very bad credit scores are good candidates for these types of loans.
As mentioned above, the online lenders make it even very easy as some offer a faxless transaction and everything is done electronically. You should take some precautions with fast cash lenders, though.
Make sure you are dealing with a company located in the United States. Find out your state’s laws regarding fast cash loans so you are prepared with knowledge and will know if you are being taken advantage of.
Jack R. Landry has a PHD in financial services and has written hundreds of articles relating to consumer services and payday loans. He has been a consumer advocate for nearly 25 years.
Contact Info:
Jack R. Landry
JackRLandry@gmail.com
http://www.CheckCity.com