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Personal Loans vs. Payday Loans: Key differences and how to choose the right one

The article from Business Today discusses the key differences between personal loans and payday loans, helping readers understand which option might be more suitable for their financial needs. Personal loans are typically larger, unsecured loans with fixed interest rates and longer repayment periods, often used for significant expenses like home renovations or debt consolidation. They require a credit check and can impact your credit score. Conversely, payday loans are smaller, short-term loans intended to cover immediate cash needs until the next paycheck, with high interest rates and fees, and are due in full on the borrower's next payday. They do not usually require a credit check but can lead to a cycle of debt due to their high costs. The article advises choosing personal loans for larger, planned expenses or when you need time to repay, while payday loans might be considered for small, urgent financial gaps, though with caution due to their predatory nature.

Read the Full Business Today Article at:
[ https://www.businesstoday.in/personal-finance/banking/story/personal-loans-vs-payday-loans-key-differences-and-how-to-choose-the-right-one-457578-2024-12-17 ]