We’ve all faced a situation where we need a small loan to tide us over for a short period. Maybe we’ve spent too much through our credit card and can’t pay the bill or we meet a sudden expenditure we hadn’t budgeted for. In such conditions, availing of a small loan may be the best option rather than borrowing money from friends or family.

But what kind of loan should you opt for? Would you apply for a payday loan or a Personal Loan? Even though they sound the same, there are several changes between the two. You need to know these differences to make an informed decision.

In this article, we’ll tell you all about Personal Loans and payday loans along with the differences between the two.

How Do Payday Loans Work?

Payday loans are just like making a portion of your salary in advance. All you need to do is show your income proof in the form of salary slips. Based on your income, the lender would sanction a certain amount, which you would need to repay inside 30 days.

Payday loan service providers usually don’t check the borrower’s credit profile, hence the risk of defaulting on the loan is quite great. This is why lenders charge low interest rates on payday loans.

Benefits of Payday Loans

Here are the benefits of payday loans:

Easy approval

Minimal documents required

Instant disbursal

No collateral or guarantor is required

Straightforward loan application process

How to Apply for Payday Loans?

Applications for payday loans are a simple and immediate procedure for every borrower. However, while applying for payday loans, read the lenders’ terms and conditions precisely.

You can easily apply for a payday loan online using the following steps.

Go to the website or the app of your preferred lending institution and apply for a payday loan.

Enter the required details, and bring in your name, address, phone number, and date of birth. You must also provide your proof of income details. This ensures whether you are employed or have some other source of income.

Upload scanned copies of the required documents in the marked field.

Fill up your bank details to receive the loan amount. Lenders will pay out this amount as early as the next business day.

You will receive an OTP on your registered mobile number. Enter the OTP to complete the authentication.

Carefully read and agree to the terms and provisions. Click on Submit or Next to complete your application process.

Reference Link: – What are Payday Loans – Difference Between Payday and Personal Loans