Why Online Payday Loans For Bad Credit Are Better Than Bank Loans

By Akshay Sharma May 26, 2020 Finance

Everyone lives on a budget these days. No matter how carefully you plan your budget there are bound to be some hiccups in your life that throw the planning off-track and force you to improvise. You can’t always ask your friends and family to help you out so you focus your attention on the only option left that is to take a loan. Two popular options in the market for loans are bank loans and online payday loans. To figure out which is preferable for you we compiled an article about payday loans online compared to bank loans. We saw that there were multiple reasons for you to be selecting an online payday loan through a private firm so we filtered them and listed the top 5 reasons.

Credit check system

A big advantage for you when you select an online payday loan over a bank loan is the credit check system. An online payday loan is provided by a private company that hooks you up to private lenders who follow a system of soft credit checks. In this system, the lender can overlook your credit score in case it is low and can look at other aspects to judge your reliability. This system creates a much better chance for you to get your loan approved as compared to bank loans. The bank loans perform a hard credit check on you in which the first thing they check is your credit score and if they find it to be too low, they will simply reject your loan request.

Processing speed

The processing speed of a loan is something that matters a lot in this age of hyper-speed technology. Unfortunately, banks are still stuck with the old and offline systems of processing your loan request. Simply put, the banks take around 2-3 weeks to process your loan application and to send the money to your bank account. On the other hand, when you apply for an online payday loan, the processing takes only a couple of minutes. The actual money might also reflect in your account within 24 hours.

Mortgage

Banks mostly require you to mortgage a car or some property to give you your loan. This unreasonable practice is not witnessed when you apply for an online payday loan. This small but simple fact is a real game-changer.

Interest Rate stability

You would not find any stability in the interest rates on loans given to you by banks. They charge a higher interest rate to a customer who has a lower credit score and vice versa. Such discrimination is not done by online private companies and everyone is treated the same.

No Scrutiny on Expenditure

You’ll be surprised to know that you are not allowed to spend the loaned money anywhere except on a reason listed by you in the application form. The banks keep a close look at your expenditure of the money. On the other hand, when you receive money through an online payday loan, you have full freedom to spend the money in whichever way you like.

When you need financial aid you expect it to be given to you easily without creating any more problems than you already have. These 5 reasons should be enough for you to be convinced that online payday loans are much better than bank loans.