Understanding the difference between a payday loan vs a short term loan can be confusing because technically, they are both loans lasting for a short period. But, there are plenty of differences to make both of these types completely different from each other.
Main Differences
When dealing with payday loans vs short term loans there are plenty of differences, but what are the main ones? The most common differences include:
- The number of repayments you make
- How long you have either for
Despite both offering up to £1500, they are not the same type of loan.
Payday Loans
Payday loans are short-term loans originally designed to tide people over until payday. Therefore meaning that you will repay the loan using your wage at the end of the month.
One of the best things about payday loans is that they are a fast and easy option that you can take when you need to. Although, You should only borrow a payday loan if it is for an emergency as you should only borrow a payday loan if it’s for an emergency as you could find yourself in serious debt and further financial issues.
Short Term Loans
Short term loans can be the same amount as payday loans, but they have different repayment periods. In other words, these loans can be offered to those who want to borrow and be repaid for up to 12 months. Typically, these loans are used to pay off urgent, essential payments. This is because they offer an easy route with the repayment period and the small amounts.
Similarities
There are numerous similarities between payday loans and short term loans, but do you know what they are? Some of them can be guessed from the information above and others you may not know at all.
How can I apply?
Thankfully, payday and short term loans can be applied for online. An application form can be completed and submitted within minutes. Although, some lenders Including major bank branches are still using the traditional method of applying via the post. Despite them being widely known for their financial status, this is not the best option as it could take months for you to get your desired loan. Here at LoanPig, you can apply for a loan and receive it the same day if your application is accepted.
What are the different requirements?
For both payday and short-term loans, the requirements are the same. Despite being able to borrow for a longer period with a short term loan, there are no extra requirements you must stand by. Here at LoanPig, our requirements include:
- Be a UK resident
- Be 18-years-old
- Have an active bank account and bank card
- Either be in permanent employment or through receiving some form of disability/living allowance or a pension
How much can I borrow?
For both Payday loans and short-term loans, you can borrow up to £1500. Here at LoanPig, we offer loans starting at £100 this makes us different from other lenders. Typically lenders begin their lending range at an amount higher than that.