People tend to think of all debt as being created equal. If you owe a $300 payment at the end of the month, what’s it matter how that money was borrowed?
But the type of debt you incur can affect every part of the repayment process. Depending on factors like interest rate and loan term, borrowers can have vastly different experiences repaying the same amount of money.
What is a Payday Loan?
A Payday Loan is a short-term loan where lenders offer you credit for shorter durations typically till your next paycheck.
What is a Cash Advance Loan?
A cash advance is a short-term loan from a bank or an alternative lender. Cash Advance loan has faster approval and quick disbursal
How Payday Loans and Cash Advance Loans compare?
- Loan Term
A payday loan is an extremely short-term loan usually due within a month, while a cash advance loan has longer-term ranging from few months to one year.
- Interest Rate
Cash advance loans have a much lower interest rate than payday loans, which can be helpful if you’re using it as a debt consolidation loan or to pay for an emergency. Payday loans also have a small maximum amount, usually $500 or less. Some cash advance loan companies allow you to borrow as much as $100,000.
- Accessibility
Payday loans are much easier to access than cash advance loans. You just need to stop into a payday loan store, where you can have the loan within 30 minutes. A cash advance loan can take a few days to process.
- Credit Score
One lesser-known distinction between payday loans and cash advance loans is that only cash advance loans show up on your credit report. If you take out a cash advance loan and make payments on time, your credit score will climb. That will help you qualify for better loans and interest rates in the future.
- Collateral
A key similarity between payday and cash advance loans is that both are often unsecured, so there’s no property or asset behind the loan. In other words, if you default on a payday loan or cash advance loan, there’s nothing the lender can seize.
Final Thoughts
If you have the option between a payday loan and a cash advance loan, the latter will always be the less expensive option. If you try to apply for a cash advance loan and don’t qualify you can go for a payday loan from paydayplus.net