Different Names for Payday Loans

Payday loans have been around for years now, and every day they help people manage their cashflow and keep on top of their finances. For some people, unexpected expenses pose no issue at all, but for others, it can throw an entire month’s budget off course. Looking for small amounts of cash to help you tide over the bills until payday following an emergency payment can become confusing. You might be sure that you need a loan but struggling to determine the difference between the various products that appear when you search for the 10 best payday loans.

It’s likely that you’re trying to differentiate between the same product as ‘payday loan’ is just one term to describe a short term loan, and it’s not the only one. You might also see them described as:

  • Instalment loan
  • Same day loan
  • Bad credit loan
  • High acceptance loan

The different names are born from the varying purposes of short term loans.

Instalment loans

This only applies to a short term loan that is repaid over several months, instead of just one. Typically, instalment loans help customers manage the costs of their borrowing by spreading smaller repayments over at least 3 months, but up to 12 months in some cases. They’re increasingly popular compared to singular repayment date loans because they have a lesser impact on your finances come payday.

Same Day Loan

A same day loan gets its name from the speed at which an approved application turns into your much needed funds. Usually, you’ll get the loan on the same day that your application is approved, but more often you’ll receive the cash within minutes. This makes payday loans a common choice for those who need to borrow money urgently.

Bad Credit Loan or High Acceptance Loan

This might be self-explanatory, but short term loans tend to have a higher acceptance for customers with bad credit histories. It’s not an absolute rule: lenders still conduct affordability assessments and creditworthiness checks, but you won’t be immediately rejected just because you have a low credit score or a less than perfect credit history.

Short term loans are also called online loans but it’s worth noting that not all online credit is a payday loan. Part of the attraction of a short term loan is the accessibility, not just in terms of who they service, but also that you can apply anytime, anywhere. Most lenders use an automatic assessment so even if you apply in the middle of the night, you’d still often get a loan decision within minutes.

What is a payday loan?

You’ve probably gathered an understanding from the above, but in summary: a payday loan is a small amount of money you can borrow for a short period of time to meet any unexpected expenses and emergency payments. They can help bridge the gap between paydays and generally help you manage your cashflow on odd occasions throughout the year. Payday loans are quick to apply for and they are an accessible form of credit but should only be used for important payments that can’t wait until payday.

Find a short term loan

Whatever you prefer to call a short term loan, finding one is relatively easy. To get the best deal, it’s a good idea to use short term loan comparison sites to compare direct lenders before applying. It can highlight the main points you need know, such as:

  • Interest rate
  • Default fees
  • Total cost of borrowing
  • Repayment frequency

This helps you decide which lender provides a suitable loan for your needs and most crucially, which is the cheapest lender. There’s little point paying more than necessary for your borrowing if there are no additional perks.

However straightforward information is presented on a payday loan comparison website, always check your loan agreement before signing on the dotted line. It’s cliché advice but it is imperative you understand the full extent of your responsibilities as a borrower. It can also provide details such as how to withdraw from your loan agreement, should you decide you don’t need the loan after all.

Taking the time to research and check your application before pressing ‘submit’ also provides you with some thinking space to consider if you really need the loan you’re applying for. Whether it’s a payday loan, credit card or even just an overdraft: do you really need to use credit to make the purchase? Taking out credit unnecessarily can cause money issues and make credit hard to obtain when you really need it. Check that the loan is affordable, and only borrow the amount you need!

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All you need to know about short term loans

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