Personal loans come in many different ways and they are suitable for almost any need. They can be used to pay an urgent bill as well as to finance a wedding party.Payday LoansPayday loans are the most used variety of personal loans. They are a source of fast cash for an urgent need if you do not need a huge amount of money. You can resort to them if you are looking to pay for those bills before reaching the deadline, to pay for your broken car reparation and for many other things, they have the shortest terms of loan products. They usually last for to weeks, and they have to be fully repaid at that limit date. Their strongest point is that you can be eligible even with bad credit and without using any collateral. Anyway, as better your credit is better will be the loan conditions that you will be able to obtain.Consumer LoansThese kinds of personal loans are offered in many ways. They are separated into many categories depending what would you like them for. They can be personal loans for any purpose -such as buying a new TV or go on holiday-, Recreational vehicle loans, wedding loans, computer loans, etc.These kinds of loans have more requirements for approval than payday loans have, since you can borrow higher amounts of money, they have longer terms and usually they offer better conditions.Payday Loans Vs. Consumer LoansAs it was said before, payday loans are a great source of fast cash. You can apply and get the money in your bank account within the next 24hs of your approval. Another advantage is that they do not have many requirements to be fulfilled, and your credit score does not have to be perfect to be approved. As some disadvantages we have to mention that the short terms of these loans are not always easy to accomplish with. Many people borrows as much money as they can apply for, even when they do not need such amount, and then they find many difficulties to accomplish with the loan terms, having to ask then for a rollover. This implies extra fees, penalties and even higher rates to be paid for the borrower. Other weak point of payday loans are interest rates.
They are higher than other kinds of loans’ rates, and they will be even higher if you do not have a perfect credit history.Consumer loans, in the other hand allow you to obtain higher amounts of money, depending on what do you need them for. Interest rates on consumer loans are lower than those of payday loans. You will be able to find many different rates according to your desired loan product.You can find consumer loans in both, secured and unsecured ways. Secured personal loans will require you to place an item as a collateral, to lower the lenders’ taken risks. With these loans you will be risking your property, but you will be able to get very good loan conditions, and if you accomplish with your payments you will not have anything to get worried about. Unsecured loans will not require any collateral and will not imply any risk for you, but they have higher interest rates.Another good thing of consumer loans is that their terms are much longer than payday loans’ terms are. You will have many different repayment terms options, commonly between one and fifteen years.As a weakness, we can mention that consumer loans are not as easy to obtain as payday loans are. You will have to pass through a deeper credit investigation and the loan conditions and borrowed amount of money that you will be able to get will depend most of all on your credit history.Making A DecisionAfter carefully evaluating both kinds of loan products you will have to decide, which one goes better with what you are looking for. Start searching for a lender, and chose your loan product after you have heard as many options as possible in order to find the best deal.