However, payday loans come with a higher rate of interest. Therefore, you may need to compare offers and go for the best one. With the advancement in technology, social trends have transformed the way of managing finances too. While comparing is an important aspect for you due to the varying rates of interest charges, online comparison has made it trouble-free for you to evaluate payday loans.
Let’s explore more about comparing payday loans in detail below.
Understand Payday Loans
Basically, payday loans are short-term, unsecured loans where the individual lends a small amount of money at a very high interest rate. The borrower permits the individual to borrow the amount through a post-dated personal cheque. The cheque is then cashed on the date written on it. Payday loans are also known as cheque advance loans or cash advance loans.
Payday Comparison is of Paramount Importance
As mentioned above, a payday loan has very high interest rate (APR) attached to it. This is why it becomes really essential to compare the different APR (Annual Percentage Rate) costs and fees. This helps you coming up with an appropriate decision and clearing your mind about what you will have to pay back. Additionally, when you evaluate the sites and check the APRs, you will be able to make a decision about whether or not you will be able to pay back the loan.
Nowadays, several payday loan companies have added sliding calculators on their websites to help you understand how much you will have to pay and how much the payday loan will cost you.
Here’s What You Should Compare
The first thing to look at in a payday loan is the interest rate it offers. This will help you in determining what interest amount you will be required to pay on the loan. Generally, all payday loan companies have higher interest rates. However, there may be at least one that could help you in making a less costly decision.
While APRs are one of the main aspects in comparing payday loans, you also have to see what kind of loan term the lender offers. previously, you would have only found short-term loans to last for one month.However,when the lending companies found that the payday loan industry has become really competitive, they introduced longer term loans as well. These long-term loans had a 6 month limit. So, those borrowers who think that they cannot pay the amount in one month find long-term loans a feasible option. But you still need to keep in mind the interest rate.
Furthermore, along with interest rate and loan duration, you also need to see the credibility of the lending company. In order to determine its reliability, you should see whether the company is certified or not. One of the best ways to verify a company is to see see its rating on the FCA Consumer Credit Register. All licensed UK lending companies are registered under it. Getting payday loans from lenders which are not certified is really risky. To avoid the high risks and unpleasant consequences, ensure to borrow payday loans from a licensed lending company.
Compare the Types of Payday Loans
The main concept behind payday loans is to help you out by granting you small loans. There are several kinds of payday loans that you can opt for. Online payday loans are one of the common types that permit the borrowers to fill an online application rather than filling it in the form of a hard copy. In this type, you can only borrow money until two weeks after which you have to return the principal as well as the loan amount. Additionally, there is a no-fax payday loan which is almost similar to online payday loans. Here, the lender deals through phone call and asks for the information and tallies it online.
Another type is the instant payday loan which is given to the borrower as soon as the application gets approved. 1 hour payday loans are the ones which are provided to the borrower within an hour of applying. In addition to this, 30 day payday loans take care of repayment of loans in 30 days since two weeks are not enough for loan repayment. Military payday loan is also a lending institution that is especially designed for military servicemen. In this type, military men can borrow money when needed.
Low Fee payday loans have a core aim to serve those who cannot pay the high fees and rates associated with conventional payday loans. Moreover, you will also find credit-based cash advance loans which are of 2 types: income-based cash advance and credit-based cash advance. Income-based advance is based on the income of the borrower, while the credit-based advance is based on credit scores and history. Out of the two options, people likely go for income-based advances because of the ease to obtain them.