What Is the Difference Between a Checkbook Loan & a Payday Loan?
When you are in need of fast cash, a payday loan may be one way to get the money you need. There are many different terms for these types of loans, such as payday loans, cash advances and checkbook loans.
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Identification
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A payday loan is a short-term loan that does not require collateral or a credit check to receive cash until your next payday. They are loans meant for those who need to get money fast, and who generally cannot or do not want to borrow from another source, such as a bank.
Differences
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A payday loan and a checkbook loan are generally the same thing, albeit with different names. Both lend money to people with the requirement of the loan being paid back on the borrower's next payday. Both operate in physical locations and online. A physical location may call themselves a checkbook loan place because you will need your checkbook to fill out a post-dated check to receive a loan.
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Requirements
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The requirements for these types of loans are simple. One must be 18, have a checking or savings account, and have a verifiable source of income. This may be from employment, or a structured settlement, or even child support or disability payments.
Benefits
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Checkbook and payday loans are beneficial for people who need money fast, as you can generally get money immediately or within 24 hours. There is also no credit check or collateral needed to receive a loan.
Warnings
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Checkbook and payday loans require their borrowers to pay high finance fees for the privilege of borrowing money with no collateral. These fees may run from $10 to $30 per $100 that is borrowed, which comes due when the loan amount is paid. Additionally, some online companies set up the loan to automatically renew every payday, which can cause even more financial trouble if the borrower is unaware of this practice.
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