When people are in need of some quick emergency cash, there are several options available to them due to the range of quick loans you can apply for in the US. But, one of the most well-used quick methods of borrowing is payday loans.
Payday loans are one of the most popular emergency loan options, with over 23,000 payday lenders across the US – which is twice the number of McDonald’s restaurants. Their popularity has left payday loans widely available to the public in the states where they are legal, and they can be borrowed both online and in-store. But, what is the difference between withdrawing your loan at a payday store versus an online lender, and which is the better option of the two? Keep reading to find out more.
What Is a Payday Loan and What Is It Used For?
First things first – what is a payday loan? A payday loan is a type of short-term borrowing wherein a lender will extend a settled amount of cash to you at a very high-interest rate. It is generally a portion of your next paycheck, and is typically due on your next payday. These loans are also commonly called cash advance loans or check advance loans.
Payday loans are typically borrowed by people who are in need of quick emergency cash. As payday loans can be withdrawn relatively quickly, they can be helpful to those who are going through an unforeseen or difficult circumstance that is causing them financial strain. Because of events such as a vehicle breaking down, household breakages (such as your boiler breaking) or a family emergency, you may not be able to cover your costs.
So, if you are in need of some funds to cover yourself, a payday loan may be useful. However, they are not available in all states so before considering taking one out, you must check your state regulations. Sixteen states – Arizona, Arkansas, Colorado, Connecticut, Georgia, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Dakota, Vermont, and West Virginia—plus the District of Columbia, outlaw payday loans of any kind.
Besides these states, payday loans are available online and in-store, though regulations will vary. But, what are the differences between these two withdrawal options?
What Are the Main Similarities and Differences?
Although payday loan stores and online payday lenders both have the same function, they operate in slightly different ways and there are varying benefits and disadvantages to both of them.
- Access – Online payday lenders offer access to customers throughout the year be it early in the day or late at night. You can always fill out a quick form and apply for a loan then and there. Alternatively, you will need to travel to a loan store during typical work hours so, for example, if you need a loan but it’s late on a Friday, you may need to wait until the next available working hour on Monday.
- Speed – Similarly to how online lenders are more easily accessible, withdrawing loans from them is also faster. There is less paperwork and a faster approval process.
- Safety – There is an argument to be made that withdrawing your payday loan in-store is a safer option. Physical payday stores establish and build trust with their clients, they can also have specialists to give answers to clients’ questions before they decide to obtain a loan. Though online services have information for customers to educate themselves with, this may not be as informative as live help for your application process.
Beyond the speed, convenience, access and necessary paperwork, the application process for withdrawing a payday loan functions in the same way whether you’re borrowing from a loan store or an online lender.
Which Should I Borrow From?
When it comes to choosing whether you’d opt for withdrawing your loan from an online lender or loan store, it may simply be a choice of personal preference. An online payday lender may be a more convenient option as it is quicker to take out and can be more easily accessed at any time. This may be particularly useful if you work and cannot find the time to go to a physical store during the week. Applying online can give you more privacy to apply for a payday loan and from the comfort of your own home.
However, there may not be enough information online to help you make informed decisions immediately on the terms of the loan agreement. This may lead to you being trapped into borrowing more than you can handle because of the simplicity of the online process.
Borrowing from a payday loan store, on the other hand, can help answer the enquiries of borrowers before making their decisions. Because of this, you can get a more well-rounded understanding of the application process, leaving in-person stores with the appearance of a more secure customer experience.
Despite this, some consumers may still prefer withdrawing their payday loans online as in-store customers are required to provide more information – this may include proof of income, bank statements, proof of residence, and other personal references. Borrowing online is much faster as it generally only required proof of income and identification but, of course, regulations will vary.
All in all, it may simply come down to a matter of opinion. There are more online payday loan services than traditional stories across the US, so it may simply be easier to access a payday loan online depending on your location. Besides this, it is up to you to decide what your priorities are when it comes to withdrawing a payday loan.
