Unsecured and Secured Loans: Payday Loans are unsecured loans wherein no collateral is needed and Other Loans such as Personal Loans are secured loans wherein your property or some asset would get mortgaged.
Approval: Payday loans are approved on the basis of your income and are designed to repay full amount on the next paycheck received. Other loans such as Personal Loans are approved after estimating the asset and monthly income and need to payback in monthly installments.
Duration: Paycheck Loans are short term loans which are to be made on the next month’s payday. Other loans are long term where repayment is calculated on monthly basis.
Interest Rate: APR is levied on payday loans which is higher than other loans.
Risk Factor: Payday Loans have higher risk factor for the lenders as no collateral is needed. Whereas in other loans if the borrower is unable to pay back his property can be seized.
Eligibility: In Payday Loans you should have a regular income and for other loans you need to have a regular fixed income along with an asset to be mortgaged.
How much money can be borrowed: In both it depends upon the income of the borrower but Payday Lenders lend amount from $100 – $1500 while in other loans amount varies from $3000 – $2,50,000 depending upon the repaying capacities.
Purpose: Purpose to borrow is at the discretion of the borrower but Payday Loan is generally for small purposes that can be repaid next month such as repair of car, for a small celebration in family and other loans are for bigger needs such as purchase of a big car, for full white wedding or some big surgery.
Repayment: Payday loans are to be repaid on or before next month’s payday whereas monthly installment to be paid for a Personal loan or any other loan.