What is the Disadvantage of Banks Loans Compared To Using Payday Loans? When you are having a hard time finding a bank to lend money to you, sometimes a payday loan looks great when they will provide the money to you quickly. But consumers should know what the disadvantage of bank loans compared to using payday loans are. There several disadvantages and they can also be costly to the average consumer. Especially if you have bad credit or cannot get a loan anywhere else. We thought we would list all of the disadvantages of payday loans compared to bank loans and let the reader decide which one they want to use in their own personal financial situation.
The disadvantage of Banks Loans Compared To Using Payday Loans
Payday loans are:
- Always more expensive on several fronts for the average person
- The interest rate will be much higher than a normal loan you would get from a bank
- The processing fees are also much higher
- The late penalty fees will also be exorbitantly high
- They are short term loans usually due on your next paycheck
- They are often very small loans to control the risk
- It can be difficult to get out of the cycle of using payday loans
- Payments are high compared to the amount borrowed
Bank Loans:
- Less expensive than payday loans
- Lower interest rates even for poor credit borrowers
- Processing fees are lower
- Late penalty fees can be negotiated in advance
- Longer-term loans mean lower monthly payments
- They cost much less than payday loans