As far as the financial options usually employed by borrowers with less than perfect credit, the payday loan is usually the most expensive. However, in terms of the timeframe of these loan options, this sort of loan is usually the most convenient for short- term bridge loans.
Although the expense of the payload can be quite high, there are still many uses for which it is actually the best choice. Below we will compare a few financial options to the payday loan option so that you can make an informed decision about which option to use in your own accounting.
Payday loans versus Second mortgages
Payday loans are usually much more flexible than second mortgages. The amount of money that is usually procured through a payday loan is not comparable to the money that can be procured from a second mortgage. Second mortgages are usually employed for large expenses such as continuing education or home remodeling.
The interest rate for a second mortgage is usually much lower than that of a payday loan; however, the total amount paid back to the lender is usually much larger for a second mortgage because of the time frame involved.
Payday loans versus Credit cards
In terms of general usage, credit cards are usually employed for ongoing expenses such as a car payment or a mortgage. Payday loans are usually meant for shorter- term, more immediate one time expenses such as paying off a late bill before penalties are incurred or dealing with taxes.
In terms of interest rates, some credit cards can actually rival payday loans. Take caution when choosing a credit card, because some credit underwriters have been known to give themselves the power to hike interest rates without your knowledge in their contract language.
Payday loans versus Title loans
Payday loans are considered much less risky than title loans because of the securitization of a large asset. Households with one car that depend on that vehicle for their total transportation should be wary of title loans if a payday loan option is available.
Payday loans versus Other lines of credit
Other lines of credit can vary considerably in their comparison to payday loans depending on the reputation of the underwriter and the terms of the contract.
If you decide that a payday loan is the best option for you, one of the most reputable companies in the country is My Canada Payday. They are reliable and have been in business for several years offering these types of loans.
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