Is There Some Differences between Short Term Loans and Payday Loan
October 16, 2018
Have you thought about a payday loan recently and wondered if they’re the same as short term loans? To be honest, most people think a short term loan is a payday loan and while that’s one option for short term loans, they aren’t the only option available. In truth, payday loans and short term ones are somewhat different from one another and it’s not something most people realize. What differences are there between a short term and payday loan?
Payday Loans Require Payment within a Month
What you do have to remember is that all shorter term loans usually have a smaller repayment time. With payday loans, they usually have to be paid back within the next payday for the borrower. For example, if the borrower took out a loan on the first of the month and their next payday was the thirtieth of the month, they usually would have to pay on or around that date. However, with a short term loan, you can often find the loan doesn’t have to be paid back as quick. Some lenders offer a higher payment rate per month for several months, usually no longer than twelve. There are differences between payday and shorter term loans in terms of how long there is to repay the loan. A direct short term loan lender can often allow a reasonable payment time for borrowers.
How Much Can Be Borrowed Can Vary
There are some lenders that will limit how much a borrower can borrow at any one time with them. For example, payday lenders can say borrowers can choose a loan between one hundred and fifteen hundred at one time. However, some other short term loan lenders can set their borrowing amounts slightly higher depending on the overall borrowing period. It can vary considerably so there are differences between payday and short term loans. In most cases, short term loans are popular simply because there is usually a slightly longer repayment time.
All Loans Carry Risks
Whether you choose a direct short term loan lender or a payday lender, you have to understand there are risks. Like rewards, there will be risks with loans and the one you choose has to work for your needs. Before choosing a loan, it’s important to know what type of loans you can choose from and which might work better for your financial needs now also. A lot of people don’t do that and end up choosing the wrong loan. It’s important to choose a loan that works for you in the short term even if it means taking slightly longer to obtain.
Choose Your Next Loan Carefully
When it comes to loans, you have to be smart and ensure you choose the right one. Short term loans come in all forms, and it’s important you get the loan which is best for you today and tomorrow. Remember, a loan can be with you for several months, even a short term one so you want to ensure it’s the right one for you at this time. Short term loans can help in many ways but you don’t want to rush at this decision.