There are so many differences between payday loans and bank loans. It would be nice if you know the various kinds of things that are concerned with these two types of loans. In this article we will discuss the 5 main points of payday loans vs. bank loans namely: lenders, the number and period of loans, the process taken and the purpose of making a loan.
Difference 1: Who gives a loan
The first difference from a bank loan and a payday loan that is so visible is when you read ‘Bank Loans’. This means that anyone who has savings or credit at the bank can directly or indirectly get a loan from the bank. In contrast to payday loans, where loan money given from the private sector does not require you to be bound to them in any matter other than borrowing the money. You can find this on the internet.
Difference 2: Amount that can be borrowed from bank and payday loans
Another difference between payday loans and bank loans is the amount that can be borrowed. Bank customers usually can only borrow if the amount of money borrowed is around or up to Rp.100,000,000. Conversely, good news for people who use payday loans, especially for people who use the internet to find loans, because by borrowing with a payday loan you can borrow in relatively not so large amounts. At Lunafe the minimum loan amount is IDR 4,000,000.
Difference 3: In terms of payments between bank loans and payday loans
Banks usually give a long time for you to repay the loan they gave. This causes installments and debt interest to swell. Conversely, in the case of using a payday loan, a relatively short period of payment certainly makes the money borrower avoid cost overruns in the medium and long term. This can sometimes lead to misunderstandings in calculating credit costs (total annual costs). Sometimes payday loans look so heavy because every month you have to pay a nominal amount that is slightly larger than the bank. This is caused by differences in calculations where the bank asks you to pay for a long period of time and high interest, while with us you may return money in a matter of months so that the interest you pay also decreases.
Difference 4: Process for loans
Another difference that is so striking is the loan process and requirements needed. By using a bank loan there are several steps that must be passed such as the rules at the bank and the opening hours of the bank itself. It makes people troubled in lending. In addition, documents are required when the loan process is carried out such as: collateral, payment according to an agreed schedule, credit report and others.
Conversely, payday loans are far more flexible. Especially since the emergence of sites like Lunafe. Simplified procedures such as can be done remotely (anywhere) using the internet. In addition, the web portal is always available 24 hours a day, 7 days a week. Documents needed are not as complicated as when you borrow from a bank. You don’t need a credit bureau, paychecks and unsecured payments.
Difference 5: The purpose of borrowing money
Common things that you usually hear from banks are a number of questions about the purpose of borrowing. Will the loan be used for college purposes, buying a car, buying home appliances, or buying other items. But this is not the case in private loans. payday loans will not ask for the purpose of your loan. Whether it’s to go on vacation or to anticipate if something unexpected happens. If the borrower is a businessman, this payday loan can solve problems and can increase the company’s liquidity in dealing with cash costs. Because money can be returned in a short time, so it will not disrupt the company’s debt ratio itself.
Thus the article regarding payday loans vs. bank loans, hopefully this article is useful for you to get to know more about payday loans and bank loans and their differences (payday loans vs. bank loans). If you are still confused about the differences between the two, do not hesitate to ask the Lunafe. We are here ready to help you.