Why lines of credit are better than payday loans

What comes to mind when you need urgent financial support? Some will say payday loans, others will say lines of credit. But what is the best option that will help you in 2022? Today, I’m going to show you which option between the two would be of great help while considering many factors. But first,

What are payday loans?

Once you take out a payday loan, you’ll get your funds as quickly as possible, but the lender will need you to repay the loan within the next 16 days. Additionally, payday loans are very expensive, with an APR of over 391%. It doesn’t stop there. Once you skip a payday loan repayment, thelenders will double interest, and it will eventually become difficult to repay the loan. So imagine if you were to pay a claim of $50 after doubling the bet, the new interest would be $100. And it’s not a small sum.

What are lines of credit?

Lines of credit allow you to access funds whenever you need them. You can only get a line of credit from a bank where you have a checking account. You can pay a line of credit immediately or after agreement with your bank. In addition, the interest rates for lines of credit are cheaper than those for payday loans. However, to access a line of credit, the bank will perform credit checks, and if you have a bad credit score, it will not be a good idea. for you.Now,

What is best for you in 2022?

In terms of speed

If it’s time to get quick cash with quick approval, you may need to consider payday loans instead of lines of credit. Once you apply for a payday loan, the lender will approve the loans within hours. As for lines of credit, it can take time as the bank has to do credit checks and see how much you should get. Therefore, if you had an emergency, lines of credit would not be a good option for you.

Interest rates

As much as the interest rates on lines of credit vary, they remain the best compared to payday loans. As I said earlier, payday loans are expensive, short-term loans that you pay back in 16 days. If you don’t want to get into apossible debt trap, then payday loans should not be on your mind. The terrible thing happens when you cannot repay the loan within the agreed time, the lender doubles the interest. And that makes it more difficult to repay the loan, and therefore default.

Refund conditions

Once you’ve taken out a line of credit, the lender may give you extended and flexible repayment terms that might be good for you. On the other hand, payday lenders need their money strictly after 16 days. That is why they are called payday loans. Once you skip this payment, the trouble begins. Therefore, if you need flexible payments without affecting the interest you pay, lines of credit would be the way to go.

The legal

Some payday lenders do not follow any state guidelines regarding consumer protection. And that is why the interest rates are too high compared to other loans. However, lines of credit come from banks that generally have valid business licenses and follow state consumer protection rules. Therefore, if you need a loan from a reliable source, it will be a good idea to go for lines of credit.

The best for bad credit

I said that the banks that give lines of credit do credit checks, so those with bad credit might not be lucky enough to get help. However, with payday loans, lenders don’t even care what other type of loan you have. Instead, they focus on your ability to repay the loan. And that’s why they attract many borrowers on board since most have lousy credit. Payday lenders tend to exploit those with bad credit because they can’t get loans anywhere else. However, this is different from the Vivapayday loan, which will give you afast payday loansat an APR ranging from 5.99% to 35.99%. But if your credit rating is bad, payday loans will be your best option for 2022. But don’t expect to build your credit rating using a payday loan. Payday lenders do not report your repayment discipline to any of the three credit bureaus.


Now that you’ve seen the best option to help you financially in 2022, now you need to make sure you don’t fall into a debt pit. As you have seen, payday loans have very high rates that could sabotage your income. That’s why lines of credit might be the best option if you have a great credit history.1