Which is the Better Choice: Payday Loans vs. Unauthorised Bank Overdraft Fees?

When you’re short on quid, you sometimes are forced to make difficult decisions. Be glad you have a few choices. In this instance you won't find yourself between a rock and a hard place. If you're running tight on cash and have some bills that are more than you currently have in your bank account, you certainly want to avoid being overdrawn – now more than ever before. Check with your bank, because several are now changing the rules on overdrafts. Your bank might charge a £5 usage fee per month for every month in which you dip below zero. This is on top of an annualised interest rate charge of 18.9 percent. Another change is that authorised overdraft customers may be charged more than previously.

These fees are less than the maximum £10 per overdraft charge that was previously allowed. But no one who is short on sterling can bear additional costs. So the question remains, do you want to pay an extra £60 per year (should you be overdrawn every month)?

However, there is a way to avoid overdrafts when in a money pinch, and that is to use a payday loan. When you see as early as tomorrow that your bank account is going to be empty, possibly even in the negatives, you can stop the problem in its tracks with a payday loan. You're probably wondering exactly what this is. Well it's a loan taken out against your next paycheque, which you would then typically be expected to pay back at the time of your next paycheque — or sometimes the paycheque after that.

Payday loans come with several features that people in a hurry find useful:

• Funding of your account can happen within 10 minute of approval so that you can pay a large bill on the very same day.^§
• Easy application. It takes just minutes to complete and it is all done online.

Only you can know if the cost of the payday loan is less than overdraft or late-payment fees. And only you can do the math – so do it now, before those fees starting hitting your bank account!

Payday loans aren't for everyone. They're intended for times when an unexpected expense occurs and speed is of the essence. So if you find yourself in this situation, explore how a payday loan can help you today!

Back to articles.