Same day loans are becoming quite popular. You must know what these loans are and how they are different from payday loans if you want to opt for this option of borrowing.
What the Loan Option About?
As the name describes it clearly, a lender transfers loan money into your bank account on the same day you get approval. Unlike other forms of loan options that can take days, weeks, or even months, you will get the funds on the same day.
How Does it Work?
Same day loan is an unsecured loan type. You send a loan application that you can get online through a bank or a local lending company. Loan approval is dependent on your creditworthiness and ability to pay a loan back. In other words, if you have a stable employment history and a good credit score, you will qualify for the loan.
These loans are quick compared to other loan options, where the approval period is longer than two weeks. You can expect fast approval as long as you meet all the loan requirements. You are pre-qualified for this loan if you have a good credit score and a stable work record.
Once you fulfill all the same day loan requirements, your loan gets approved. The lender will transfer money into your bank account, which you provide during the application process.
Difference Between Payday Loans and Same Day Loan
In case of a payday loan, you get a fast money transfer into your bank account. It’s a short term loan that you will have to pay back in full in the next 30 days. It’s known as a payday loan because you need to clear it on your upcoming payday.
Same day loan is also a short term loan facility, but it doesn’t require you to pay the loan back in full after 30 days. You can pay your loan back in manageable monthly installments. Therefore, a person should consider same day loans as they offer a more flexible payment schedule. It’s not easy to pay a lump sum loan amount for many people in a payday loan. This repayment flexibility is one of the reasons people prefer same-day loans.
On the flip side, anyone can pay back his loan in small monthly installments quickly. Some online lenders let a borrower with bad credit get this loan; however, there is a guarantor requirement.