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Payroll Loans’- ‘Payday Loans’, sound similar right? With titles so akin, maybe they’re the same thing? After all, we have drinking fountains and water fountains, roundabouts and traffic circles, for the ice cream accompaniment lovers out there we have the ageless “sprinkles vs hundreds and thousands” debate, maybe this is a similar situation? The answer is, quite simply, an emphatic no. Payroll loans and payday loans are not the same thing. The differences between the two are stark, numerous, and vitally important to understand – and that is the very point of this blog, to breakdown and detail those differences through analysis of the facts.
There are many aspects to payroll loans that set them aside from payday loans. In fact, it’s no exaggeration to say that there are many aspects that make payroll loans the complete polar opposite of payday loans. Let’s start with the basics……
What is a Payroll Loan?
In simple terms, a payroll loan is a fixed low-interest rate short-term loan where the repayments are automatically deducted directly from the employee’s salary.
What is a Payday Loan?
A payday loan is a supposedly short-term extraordinarily high-interest rate loan where the individual is responsible for instigating repayment.
Remember those stark differences we talked about? Well, here is where they become pronounced and, quite frankly, shocking. The fact is that GettaSub’s interest rates are monumentally cheaper than mainstream payday loan lenders. GettaSub’s salary-advance loans come with a fixed interest rate of just 5% (79.58% APR representative) for the duration of the loan. For example, a £250 GettaSub loan will cost the borrower just £12.50 in interest based on 30 days, so the total payback amount would be £262.50. In striking contrast, mainstay payday loan lenders default interest rate runs at 45% (with typical APR rates between 1500% and 2500%).
Further Important Differences Between Payroll Loans and Payday Loans
Beyond the chasm of interest difference, there are a number of other distinct contrasts between GettaSub’s wage-advance loans and mainstream payday loans. We’ll now take an accurate and succinct look at those differences:
In short, payroll loans are a responsible, sensible, risk-free benefit an employer can offer their employees to ensure any short-term financial needs of the employee (that may be affecting their wellbeing across all aspects of their life, including work) can be resolved. Payday loans are riddled with risk and induce a high percentage chance of exacerbating the borrower’s problems, not resolving them.