Private loan, personal, payday. So many names for seemingly similar services. In fact, these are similar services that target a different clientele, depending on the specific needs of this clientele.

With such a diverse choice, it is difficult to choose the loan that best suits your needs. In order to make the best decision, one must understand the similarities / differences and the advantages / disadvantages of each loan.

Personal loans

Personal loans

Let’s take a look at the personal loan so that you have all the tools you need to make the right decision.

In fact, a personal loan is simply an ordinary loan issued by either a bank or another financial institution. This is a loan that is not issued with the sole purpose of buying a home or car. A person could apply for this type of loan to repay the high interest rates on their credit card or to deal with an emergency.

These are the main features of this type of loan:

  • A credit check is required prior to approval
  • Loan varies, but is usually higher than private or overpayment
  • The amount is higher because creditors do more checking before approval and they want higher pay (the bigger the amount, the more money the creditor makes)
  • Personal loans are repayable loans by installments
  • Since the payment dates are fixed in advance, the debtor knows precisely when to make payments

Although many choices are available to consumers, a personal loan is suggested to those with a relatively high credit rating and who wish to borrow a substantial amount.

Private loans

Private loans

Now that you know more about personal loans, let’s talk about private loans.

Ambiguous appearances, the private loan can scare many consumers. Although this type of loan is not fully defined, it is still an effective financial tool that will meet certain needs of the consumer.

These are the main features of this type of loan:

  • A credit check is not usually done
  • The money is lent by creditors or private companies (no banks or large financial institutions)
  • Versatile interest rates
  • Creditors are interested in history as a whole rather than financial figures
  • The amount loaned is less than in a personal loan, but higher than the loan-on-salary

If you are worried about your credit history or credit score, then the private loan is probably the best option for you. With this type of loan, creditors work together with the consumer to provide a viable and financially beneficial solution.

Loans-on-pay

 Loans-on-pay

Creditors offering this type of loan are looking for desperate people who urgently need money. These creditors are selling as a reliable and fast source of financing.

These are the main features of this type of loan:

  • Approval the same day
  • Extremely high interest rates
  • Prior audit pad that is done
  • The loan is made if the debtor has a job
  • The loan must be repaid the day of the next payday
  • The sum lent is usually very small

This type of loan is a bad idea because consumers are unintentionally in a vicious circle. This happens when the creditor takes another payday loan to pay off the previous one.

What is the best option?

Personal and private loans are without a doubt your best option. The application for these loans is easy, the repayment too and these loans will not damage your finances. In addition, do not worry with the search for a creditor, because a large number of competent creditors are at your disposal, ready to help you.