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Pay Day Loans or Credit Cards – Which is Better During Financial Emergencies?

There are situations when people are suddenly short of funds. It can happen with low income as well as high-income individuals. Generally, people get into financial burden, when they’re not paid on time. These emergencies can be medical bills, tuition fees, credit card due to payment, etc. Thus, it is imperative to keep savings for uncertain conditions.

However, many people who live on daily wages or have various responsibilities like nursing home assistance monthly payments, utility bills, mortgage loans, etc. often fall into tough situations. They look for quick options so that emergencies can be taken care of. Short-term loans are meant for such people should look for small loans that can be repaid quickly.

According to the policy of short-term loan, you pay the moment you get your pay check. Either you set up auto-pay with the leader or pay them every month as a reminder. The application process is done online so you can contact the lender or their customer service even on weekends.

Loan Pig is a UK payday loans online company that provide through fast and simple payday loans. They follow the FCA rules which make them reliable. They have different types of payment plans which make repayments easier and trust is built between borrower and lender. If somehow your loan application doesn’t get approved, they’ll still look for a lender that matches your requirement.

There are various ways through which you can get a loan. You can either request family, friends, go for a bank loan, short term loan, overdraft your bank account. However, some people prefer using credit cards instead of bearing the burden of any loan. Using a credit card is quite easy, but when you over exceed the limit unknowingly, then you have to bear the consequences.

We have a list below to compare credit cards and short-term loans –

Credit cards

  • Credit cards can be received with a certain limit only when your credit score is good.
  • The process of getting a credit card is lengthy.
  • There is a small interest rate attached to credit cards. When you’re charged with a balance, you get the privilege of paying the amount due instead of the outstanding balance, but even when you pay the amount due on the date, you’re still charged with finance charges which further increases your balance amount and next month your amount due increases as well.
  • The interest rate for normal expenses is less than a cash advance. If you have both expenses then your balance increases further.
  • There are many other hidden charges like annual fees, international charges, which are later shown on the bill.
  • The interest rate in credit card doesn’t go above 30% which lesser than payday loans.

Payday loans

  • They’re fast and completed online.
  • The amount is decided by the borrower and lender on mutual consent, looking at the monthly earning of the borrower.
  • The loan is passed only when the borrower feels that the lender can repay on time.
  • The credit score is checked here as well and in case of bad credit, the loan is rejected. However, other lenders provide high-interest bad credit loans even to them.
  • If the lender is regulated with the FCA, they will stick with the rules and have set fees and rates. This will not increase your balance or rate after time as long as you’re not late.
  • The interest rate is higher than you can imagine, but the repayment tenure is less.
  • The customer service for payday loans is available 24/7 which makes the process convenient.

In both ways, credit cards and payday loans are both convenient. However, the best way to take care of financial problems is by keeping a certain amount of money from your income saved. This is easy if you cut down on your unnecessary expenses.

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