| | | | | withdrawing cash up to a maximum percentage |
| In today’s world, loans are a fact of life. | | | | of the credit limit available. This is fairly easy |
| Everybody has got certain needs and aspirations | | | | option as no paperwork is required and cash is |
| and hardly ever a person, especially middle class | | | | available instantly. But interest on the cash |
| one, has enough liquid cash saved away to fulfil | | | | withdrawn is charged on the per day basis and |
| those desires and needs. | | | | the resultant amount can be quite hefty if amount |
| Even if there are certain savings and investments, | | | | borrowed is not returned back in time. The |
| they are kept to weather bad times and for the | | | | default will also be included in the credit report as |
| retirements. This gives way to the need of | | | | a big negative. |
| securing a loan to fund those aspirations. These | | | | Bank overdraft |
| aspirations may include the latest gadgets, | | | | Some banks extend overdraft facility with a bank |
| expensive furniture, exotic vacations etc. | | | | account making it feasible to withdraw money |
| Apart from desire to get worldly possessions, | | | | over and above the bank balance. While this |
| there might be some emergency such as sudden | | | | method is easy and hassle free, banks charge |
| repairs to the house or car, unexpected guests, | | | | hefty fees for overdraft services. Moreover the |
| unpaid bills, some medical emergency etc., when | | | | limit can be changed by the bank without prior |
| available cash is just not enough and quick influx | | | | notice and the borrower may be asked for |
| of cash is required. | | | | repayment anytime making this avenue quite |
| In such situations one looks to the banks and | | | | unreliable. |
| other lenders to provide a loan. Such lenders | | | | Payday Loan |
| extend financial assistance on the basis of the | | | | This is a great method of arranging the money in |
| borrower’s earning capacity, repaying | | | | emergencies. There is not much paperwork |
| capacity, past credit record etc. Let’s discuss | | | | required and tenure is usually of just a few |
| some of the most popular ways of arranging | | | | weeks. Amount extended is comparatively smaller |
| required funds through borrowing route. | | | | yet sufficient to cover up most emergency |
| Personal loan | | | | expenses. |
| Personal loans are multipurpose loans which can be | | | | Since amount is smaller and tenure is shorter, the |
| used for any purpose on the discretion of | | | | management becomes easier. Moreover there is |
| borrowers. They are of two types, secured and | | | | ease of applying, now instant payday loans can be |
| unsecured. While terms and conditions including | | | | applied to reputed payday loan companies online |
| interest are easier for secured loan for obvious | | | | from the comforts of home or office. |
| reasons, unsecured personal loans involve deeper | | | | Instant payday loans are called so because the |
| scrutiny of the borrowers and more extensive | | | | approval is within minutes and cash become |
| paperwork. Interest rates are also on the higher | | | | available in 24-48 hours of applying. Repayment is |
| side with unsecured personal loans as the risk is | | | | on next payday and for this purpose the |
| greater for the lender. | | | | borrower has to issue post dated cheque or |
| Documents required to be submitted include | | | | arrange for the automatic debit. |
| employment proof, identity proof, residential proof | | | | The only requirement by payday loan companies |
| and in case of secured personal loan documents | | | | is to have a steady employment and valid |
| of the hypothecated asset. Tenure of the loan is | | | | checking account. Even good credit history is no |
| between three to five years. To payback the | | | | criteria for granting the loan. |
| loan amount with interest, post dated cheques or | | | | Considering all these methods of financing the |
| auto debit enabling document is required. | | | | personal needs, it is apparent if time is not a |
| Best thing about personal loans is that the tenure | | | | constraint and the amount required is bigger, |
| and amount is larger helping the borrower manage | | | | personal loan is good option. However in the time |
| his/her finances better. On the downside, time | | | | of real emergency, payday loan is a better way |
| required for approval is long, 10 to 15 days, | | | | of arranging funds. Of course in the event of |
| making this route unfit for emergencies. | | | | credit cards being maxed out and credit history |
| Credit card advance | | | | being negative, payday loan is the only option. |
| Most credit cards come with the facility of | | | | |