Payday Loans as an Alternative to Unarranged Overdraft Fees

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by: Ash Jones
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Word Count: 439
Date: Fri, 1 Jan 2010 Time: 6:54 PM
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While it may not seem an obvious comparison, short-term consumer finance, and in particular payday loans, can offer a viable alternative to unarranged overdraft fees.

Many consumers underestimate spending within a month, or come across unexpected expenses that need paying before payday, and do not consider that there is a means of avoiding the fees banks impose on them if more money comes out of their account than is available within their overdraft limit.

Different banks apply different ‘unarranged overdraft' fees, and many not only apply a one-off fee but charge a daily fee or interest for each day the account remains in unarranged overdraft. These fees can escalate incredibly quickly, at a time when the consumer is ill equipped to top up their account with the money needed to bring the balance out of unarranged overdraft, let alone pay the additional fees, since it was lack of cash that brought about the situation in the first place.

Payday loans offer an alternative to this situation. They work like an advance on your salary to give you a boost of cash when you need it, and which can be repaid when you can afford to do so, namely on your payday. In this way, they offer a means of helping with emergency cash, or helping bridge the gap between when cash runs out and payday. It must be noted that they should only be used as they are designed to be used; for short-term credit needs, and when the borrower can afford to repay the loan come payday, not for long term credit needs or debt problems.

An advantage of online payday loans that is notable in these situations, where consumers need extra money quickly, is that they offer an almost instant injection of cash into a consumer's bank account. One could literally assess one's finances and realise that one's account is set to go into the unarranged overdraft, apply online in a few minutes for a payday loan, and receive cash that same day, in time to avoid the looming unarranged overdraft fee/s.

Of course all forms of credit come with an interest charge. However, this charge, along with the capital, need only be paid on one's payday - when there should be no issue with cash flow - as opposed to at the time when there is no cash coming into the account, and too much cash going out.

For those consumers who need some extra cash instantly, and will be able to repay a cash advance loan when payday arrives, this form of short term finance offers an affordable alternative to imposing unarranged overdraft fees.

About the Author

Ash Jones, author for Payday Express. Payday Express offers a fast, effective service which is completely confidential. Range of loans includes payday loans, fast cash loans and instant loans. They understand how costly life can be and how long the wait is until the next payday.