Payday loans are the common practice in America. The amount of such personal loan is not big. A person can get about 400-2000 dollars. One of the main reasons why people struggle to get personal loan is because it is accessible. Lending companies do not charge a lot for such loans. They prefer to issue more loans for smaller interest.
Interest Rate to Pay
If a person wants to get a payday loan, he/she has two options. He or she can visit a bank or apply for a personal loan online. In both cases, it is necessary to compensate loan usage. Financial institutions will ask for an interest.
Taking credit from a bank is different than taking it from online companies. These two enterprises follow different logic when issuing credits:
- A bank issues short-term loan for a bigger percentage than for long-term credits. It is more beneficial for banks to issue a personal loan for a year than for a month, which makes it very expensive. That is why many Americans apply for personal loan online.
- Online companies are usually private organizations that do not have enough financing to issue huge loans. They provide many short loans as they want to issue as many credits as possible.
One of the main advantages of taking personal loans from online companies is the range of offers a person gets. There are online platforms that serve as databases of financial companies. They send applicants documents from various lenders.
Receiving a Credit
Lenders can evaluate a borrower’s profile. Each lender proposes its own credit offer. A client gets several of them. There are issues that will differ in each offer:
- Interest rate. Some companies issue cheaper credits. Others have a higher interest rate. A client can choose the most beneficial option.
- The return date of a credit. It is also an important issue. This is a date when a body of a credit plus percentage will be taken from a borrower’s account. It’s ímportant for a person to remember when he/she can pay a credit back.
- If a borrower does not return a personal loan in time, consequences can be harmful. He/she can be fined. A lending company can take a borrower to court. If a person does not pay it back in time, a lender can confiscate personal assets of a person.
Online credits are beneficial for one more reason. It is possible to negotiate the application process with the lender. If a person lacks some documents, it is possible to substitute them. If a borrower does not have a stable job the relatives or friends write a guarantee letter to a lender. This can hardly be done if a person takes a credit from a bank.