Why Payday Loans Are Better Than Overdraft Protection

What do you do when you're suddenly short on funds? Overdraft protection can prevent situations when you run out of money, but getting a payday loan is usually a better option. 

Understanding Overdraft Protection

Overdraft protection can save you from the embarrassment of not having enough money to cover a payment when your account has insufficient funds. An overdraft protection service is similar to having a line of credit because you will be charged interest for the amount that your account has remained in an overdraft status.

If you do not repay the overdraft amount, it will eventually become delinquent and the bank will pursue collection for it just like with any other loan and may close your bank account if things get too bad. There is also usually a limit for your overdraft protection.

Loans Cost Less Money Overall

While overdraft protection can be convenient, the most cost-effective way to handle insufficient funds is to avoid this problem in the first place by having a payday loan directly deposited into your account. A payday loan comes with an interest rate an other associated fees, but these are usually lower than the interest you would pay on multiple overdrafts. Often, you are charged for each overdraft individually, which can add up very quickly. But fortunately, regulations protect you from having to pay excessive interest rates.

To minimize your expenses, make sure that you will have enough money to repay your payday loan no longer than a month after you have taken out the loan. The sooner you pay off your loan, the less expensive it will be. If you do not pay back your loan, the payday loan company will usually charge your bank account. Then, if there is insufficient money to cover the charge, you may have to pay overdraft fees on top of everything else.

Payday Loans are Fast

Payday loans are usually the fastest way to receive cash because they do not usually check your credit. If they do, they are more likely to be lenient with creditors than traditional lenders, which means you will not have to contact so many lenders before finding one willing to finance your emergency loan. Typically, you are required to provide contact information, employment information and references to contact. 

The most convenient way to receive your payday loan is to have it directly deposited into your bank account through an online payday loan resource. However, there are some cases where the lender will instead give you a check you can take directly to your bank to cash. Even if the bank is closed, if you have access to a bank ATM, you may be able to have the check deposited so that the overdraft amount can be covered, allowing your payment to be processed.  

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rapid cash loans - the benefits and mistakes to avoid

Having kids is quite an expense! I love my kids dearly, but there are times that I struggle to come up with the money it requires to provide them with everything that they need. Thankfully, we have learned about loans that can be taken out quickly to pay for emergent situations. For example, my son broke his only pair of glasses at soccer practice and I didn't have the money to replace them. I went online, applied for a rapid loan and had the money in my account to pay to get his glasses ordered with expedited shipping. Learn how our family has responsibly taken advantage of rapid lending and what mistakes you should avoid when borrowing from online resources.