The biggest strength of a payday loan is its flexibility. It’s shorter-term borrowing and you can use it to fund many things. That’s because your loan is unsecured – so not tied to a specific purchase or asset. Lenders often use secured loans if you’re buying a more expensive, valuable item like a car. Secured loans get structured in a different way to cash loans, and lenders calculate costs as an annual percentage rate (APR). Loan providers are often willing to offer lower rates for secured car loans, caravan, or boat finance, for instance. That’s because your vehicle provides security for the lender and the loan is lower-risk – so they charge less. Payday loans work well for shorter-term borrowing when there's no significant purchase involved.