Sorting Through Options: Choosing Between Payday Loans vs. Traditional Lenders

In 2009, the Office of Fair Trading (OFT) decided against restricting the way banks charge for unauthorised overdrafts. The consequences affected all 42 million people in Britain with bank accounts in that every user of a bank checking account is vulnerable to large overdraft fees.

Which elicits the question: If a working person is running short on quid, does it make sense to borrow money to keep such an overdraft from happening?

First, the depositor should consider ways to prevent such overdrafts. Arranging with your bank to have an overdraft facility can help. Then, of course, keeping good records and checking account balances through online banking can go a long way.

But there are simply going to be times when a person comes up short of cash. No amount of assiduous record keeping is going to solve that problem.

That is when a payday loan can make a great deal of sense. Here are reasons why:

• Overdraft fees on top of late fees and interest from creditors can add up significantly. Borrowing with a payday loan however, might cost as little as £20 per £100 borrowed, less than those fees. It's simple arithmetic.
• Payday loans can deliver pounds in one hour, deposited electronically after being approved.^§ That’s truly quick quid.
• The application process is very simple. When a borrower is in dire straits to manage a potential overdraft situation, they want to act quickly and with minimum hassle. QuickQuid loans require about five minutes to apply.

Every person and every situation is different, of course. It makes sense for the borrower to think beyond the present, the overdraft to be avoided or the bill to be paid today. The repayment, how the loan will be retired in a short period of time, is also of critical importance.

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