If you need cash in an emergency, you may be considering getting a signature loan. Signed loans are a pretty good way to get extra cash when you need them, but they are not always the best choice.
This article provides more information about signed loans and payday loans to help you decide which option is right for you.
About signature loans
Signed mortgages sound exactly like that. You can often get a loan of up to thousands of dollars with just your signature. For example, unlike car title loans, you don’t need to have any kind of collateral. After that, you usually repay the loan monthly based on the loan agreement.
Basically, a signature loan is a type of personal loan. Signed loans usually have a higher interest rate (APR) than mortgage-backed loans because they do not require collateral, but they are still a good choice if you need cash.
However, the biggest problem with signing loans is that you need a reasonably good credit score to apply. The higher your credit score, the more likely you are to be approved – because the lender does not consider your loan dangerous. Conversely, this means that you may not be able to get a signature loan if you have bad credit.
Payday loans are another type of emergency loan, intended for very short loans that provide emergency funding for the weeks leading up to the next payday. Most payday loans need to be repaid within two weeks, and in some cases up to one month.
Like a signed loan, you don’t need to provide mortgage collateral. However, payday loans also do not require traditional credit checks. This means that you can be approved even if you have bad credit. However, payday loans also usually mean higher interest rates than signature loans.
Do I need to get a payday loan or a signature loan?
This depends on the amount you need, the speed you need, and the purpose you need. In general, payday loans are better if you need cash in an emergency for several reasons.
- Signed loan requires credit check – If the credit is low, the signed loan may not be approved. Signed loans are an inappropriate option if your credit score is substandard.
- Signed loan approval takes time – It can take several days to approve a signed loan because the lender must process the application and verify the credit.
- Signed Loans Do Not Fund Same Day – Many payday loans offer same day cash deposits after approval, which is rare among signing lenders and by the time they are acquired You have to wait a long time for your cash.
If you don’t need cash right away and your credit score is high, a signed loan may be cheaper in the long run. But if you need urgent cash right away, payday loans are your best bet.
Know which loan is right for you!
Payday loans and signature loans each have their strengths and weaknesses, but if you need cash in an emergency, there is nothing better than the convenience of a payday loan. If you compare the two and shop, you will definitely make the right choice.