When you need a loan, there are several options you can explore, but payday loans and personal loans remain two of the most popular. Depending on your needs, each can be beneficial, and it’s important to know the difference when speaking with a loan service. It’s also important to understand the repayment terms, as delayed repayment can negatively affect your credit. If you’re considering a loan, below are a few differences to help you decide which type is right for your situation.

Payday Loans vs. Personal Loans

Payday Loans

Payday loans are best for people that need cash quickly while they’re waiting for their next paycheck. They’re typically issued in small amounts to cover general living expenses such as rent or groceries, but they also carry high costs. Lenders request information to verify that you can repay on payday, and they sometimes require collateral in case you cannot. While convenient, payday loans have high penalties when you don’t repay them on time. This can lead to ongoing debt. It’s important to think carefully when taking out payday loans and to also have a concrete ability to repay once you receive your paycheck.

Personal Loans

Personal loans are more common for larger purchases and are typically issued by banks and other financial institutions. They have lower finance fees and interest rates if you have good credit, and also have extended repayment periods ranging from months to years. Depending on your credit, you may qualify for higher loans that can be used for mortgage or auto loan payments. However, like payday loans, there are consequences when you fall behind on payments, and you can quickly sink into debt if you don’t have a financial plan.

If you need a bit of money to make it to your next payday, Advance U Cash offers affordable payday loans and other cash advances to residents throughout Florence, KY. They’ll work with you to establish a loan and repayment plan that’s flexible and ensures that you have the funds you need to cover immediate costs. Call (859) 746-2274 today to speak with their staff and visit their website and Facebook to learn more about their services.