You can use a payday loan to purchase personal items. The bank leaves you free in this. You get the money placed on your current account and from then on you can spend it. On a trip or something for your home or a hobby. The choice is yours. While a mortgage loan is about the purchase of a home. And you can’t buy anything else with that. The processing of the application is also completely different.
Proofs that you must submit
In both cases you must be able to prove that you can repay the loan. So you must have a permanent job and preferably also full-time. Then you can borrow more and spend it on the repayment thereof. If you only have a part-time contract, then the chances decrease. Because then you are a higher risk for the bank. If you work full-time and borrow with your partner, the chances increase considerably. So if you can search for a few wage sheets together then you can already prove the income. The expenses also count in the bank’s calculation. This includes: other current loans and alimony. They are regarded as a standard for a bank. And each customer can spend up to 1 / 3rd on loans of all income together. So you can already make that calculation yourself.
Do an online simulation
Useful to the websites of the banks is that you can perform a loan simulation there. You can do that for both a payday loan and a mortgage loan. For a payday loan you only have to choose an amount and duration of the repayment. You already have a result in front of you. With a mortgage loan you also have to enter an amount that you contribute from your own capital, and a part with which you will pay the notary fees. You will also see a result, but it depends on several factors.
In any case, you need a piggy bank for a mortgage loan. So that you can invest part of your own money in the home. And that is often a big bite. A housing loan can involve amounts of a few hundred thousand USD. While you might want to borrow 5000 USD for a payday loan.
The handling of a loan
It also runs differently for handling. You can apply for a payday loan entirely online. Send all data and the bank will process your request. For a mortgage loan it is best to go to a bank branch to put a signature there under the agreement. It is also important to compare with which bank you have to pay the least costs. If it concerns so much money, 0.1% makes a lot of difference.