Your car just broke down, and the mechanic told you it'll cost more than a week's paycheck to cover the repair cost. But all the money you'll get for this week and next week's pay has to go to bills!
And what's worse -- you don't think you have a high enough credit score to qualify for a loan from your bank. You start to panic.
Take a deep breath. You actually have two solid options your East Texas neighbors in Tyler, Longview, and Dallas use every day to get them through financial emergencies: personal loans and payday loans. But what's the difference between the two, and which one is best for your needs?
- Personal loans often offer much higher loan limits than your average payday loan. This is typically because personal loans can be paid off over a period of many months, while a payday loan is supposed to be paid back as soon as possible.
- Payday loans are short-term loans with high-interest rates. They're designed to bridge the gap between one payday and the next. That's why it's critical that you repay them by your next payday at most -- if not, you could end up with a worse financial situation overall.
- To obtain either a payday loan or a personal loan, you'll be required to fill out an application to see if you qualify or not. Both payday loans and personal loans are forgiving of individuals with poor or bad credit scores, but personal loans are more forgiving in the long run.
- Both payday loans and personal loans allow for small loans of as low as a few hundred dollars. Personal loans allow borrowers to qualify for sums of up to $1,300.
- Neither personal loans nor payday loans request collateral, nor do they require co-signers. However, some companies may require borrowers to include a list of references along with their employment and bank information.
- Payday loans have significantly higher interest rates than most other loan options. The Consumer Financial Protection Bureau reported that people who take out payday loans end up paying more in interest than what the original loan was worth.
- Personal loans can be used to consolidate your credit card debt because they tend to charge lower interest rates than credit cards. Plus, some people even use personal loans to pay off their payday loan debt.
Ultimately, it's up to you to decide which loan option is best for you. But if you're leaning toward the benefits of a personal loan from a quality lender like Atlas Credit, consider applying online or in one of the many brick-and-mortar locations near you.
We can get you the money you need to solve your financial emergency or help you take care of any extra cost you need covered as soon as you're qualified! Apply now or contact Atlas Credit today to learn more about the personal loan process!
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