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Personal Loans vs. Payday Loans*

You have a medical emergency and your refrigerator just went out. You need cash and you need it quickly. But how? You've heard about payday loans and you've heard about personal loans. But which loan is best for your situation? Let's compare.

Let's Compare Line of Credit Loans to Payday Loans

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LendDirect
Line of Credit

Loan Amount

Up to $15,000

Fee Structure

Daily interest

Repayment Term

Payments over time

Qualifications

Personal lines of credit don't cost as much as payday loans, but generally require good credit. In addition, it is typical to have to submit additional documentation to verify your income to get a line of credit.

Additional Money

If you need additional money, you can get an additional cash advance up to your credit limit.

Typical
Payday Loans

Loan Amount

$50 - $1,500

Fee Structure

Flat fee

Repayment Term

Due on your next pay day

Qualifications

Canada payday loans are generally available to consumers with little credit, no credit or bad credit, and are usually granted quickly without requiring much documentation.

Additional Money

With a payday loan, you will have to pay off your existing loan and then apply for a new loan if you need additional cash.

This is an example based on review of multiple personal and payday lenders. Loan amounts, fees and terms vary by lender. Be sure to visit your lenders rates & terms section on their website for loan details.

How to Choose the Right Loan

So you need cash, but you're not sure what type of loan makes sense for you. LendDirect is here to help you determine which loan makes sense for your situation.

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Personal Line of Credit

A personal line of credit offers a larger loan amount that is funded in a lump sum and paid back over time. These types of loans are typically meant for long-term financial situations.

When you might want to choose a personal line of credit:

  • When you need a larger loan amount

  • When you need money to pay a home mortgage or rent

  • When you need to pay larger automotive expenses
    (such as vehicle repairs, maintenance or monthly payments)

  • When you need to borrow money and pay it back over a longer amount of time

Payday Loans

A typical payday loan allows you to borrow a small amount of money and repayment is setup to be on your next pay day. These types of loans are meant for short-term financial situations.

When you might want to choose a payday loan

  • When you need a small amount of cash

  • When you need to pay small sized bills or payments
    (such as utilities or groceries)

  • When you need to avoid a bounced cheque or overdraft fee

  • When you only need money for a short amount of time

Requirements to Apply

Depending on the loan in which you are applying - personal line of credit or payday loan - there are requirements you must meet to apply. Lenders tend to vary on requirements, but all have the same basic requirements. The main difference between payday loan and personal loan requirements is that you will typically have to provide proof of income when applying for a line of credit.

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Personal Line of Credit

  • Basic personal information including your phone number, home address, birth date

  • Proof of income

  • Open chequing account

Payday Loans

  • Basic personal information including your phone number, home address, birth date

  • Income information

  • Open chequing account

A Line of Credit is Right for Me

Start your line of credit application online.