When met with a financial emergency, it can be a challenge to make sure that they are paid off without damaging your finances and credit score in the long term. With many having savings or family members that they can lean back on, what can those without this use to pay back loans? In this article, we will be providing you with insight into the difference between short term and payday loans and how they can aid you in navigating through a financial emergency.
What Is A Short Term Loan?
A short-term loan is a loan type that typically spans over six months to a year, and allows you as the borrower to borrow between £100 to £10,000 depending on the amount that you need. These can be applied for online through several trusted lenders, allowing you to have the money yo9u need to pay off your unexpected bills without damaging your credit score and your financial stability.
What Is A Payday Loan?
A payday loan is a loan is a loan type that allows you to borrow a small amount of money over the course of three months typically. These loan types can be directly paid from your bank account to the lender, allowing you to pay back through direct debit long time every month. This loan type enables you to pay off your unexpected bills and get yourself out of financial difficulty throughout the course of the month without damaging your credit score or putting yourself in any form of financial difficulty moving forward as you begin to pay off the loan.
How Do They Differ?
When looking at whether a payday loan or short-term loan is right for you, you need to consider the loan term as well as the amount you are looking to borrow. This is the main difference between these loan types as this will allow you to make sure the unexpected bills or repairs are completely taken care of. In addition to this, it is important to make sure that you have also considered elements such as APR and interest rate as this can have a significant impact on the amount that you are having to pay back.
How Can They Aid You In A Financial Emergency?
When met with a financial emergency such as an unexpected bill or a car breakdown, several people are lucky enough to have savings to one side to aid them throughout the course of a financial emergency, however, this is not the case for everyone. With many struggling to make ends meet when met with a financial emergency, the use of a payday or short termloan will enable you to make these payments without damaging your credit score in the long term or affect your current financial position to the point where you are missing bills or damaging your finances in the future.
With this in mind, there are several ways that you can use short term loans and payday loans that can benefit you in your time of financial need. Which of these loan types will you be opting for when met with financial difficulty.