What Are the Differences Between Personal Loans for Bad Credit and Payday Cash Advances?<\/span><\/h3>\n\n\n\nHere are the main differences between personal loans for bad credit and payday cash advances:<\/p>\n\n\n\n
Loan Purpose. <\/strong>Payday cash advances typically award no more than $1,500 for immediate and urgent financial needs such as medical emergencies, auto repairs, utility bills, mortgage payments, funeral expenses, and even unforeseen childcare costs.<\/p>\n\n\n\nPersonal loans for bad credit are best for longer-term cash flow challenges, e.g., paying off a $19,500 hospital bill or home renovation project.<\/p>\n\n\n\n
Credit Checks.<\/strong> Unlike personal loans for bad credit from banks, credit unions, and online lenders, payday cash advance lenders typically does not run credit checks, assessing eligibility based on your ability to repay through income, debt-to-income ratio, and unemployment stats. Likewise, lenders may not report to Experian, Equifax, or TransUnion, so making payments on time is a little less important. <\/p>\n\n\n\nInterest Rates.<\/strong> Payday cash advances typically straddle triple-digit APRs (local neighborhood stores) versus up to 35.99% for legit online-only options. Personal loans for bad credit usually carry APRs at most 35.99%. For perspective, a $25,000 personal loan for bad credit can have you save hundreds (if not thousands) over a cash advance (assuming the same repayment period and a 100%+ difference in APRs).<\/p>\n\n\n\nRepayment Period. <\/strong>Payday cash advances have a short-term repayment period (two to four weeks). In turn, personal loans for bad credit have a medium to long-term repayment period up to 72 months. One requires a lump sum payment, and the other requires fixed installments, each covering a portion of principal and interest on a monthly repayment cycle.<\/p>\n\n\n\nDepending on the type of loan, many lenders offer flexibility in choosing repayment terms based on individual preferences, including more extended repayment options for lower monthly payments.<\/p>\n\n\n\n
Resources.<\/strong> Payday lenders are notorious for not offering resources. Whether it’s financial education with helpful blog topics or hardship programs that allow you to defer or waive interest (short term), expect these with personal loans for bad credit, where financial institutions have a high incentive to educate, keeping consumers into the fold.<\/p>\n\n\n\n