Payday Cash Loan
A payday cash loan is a safe, easy alternative to overdrawing your checking account when you need an emergency loan. When you compare fees on a payday cash loan to the fees on overdrafts and even to the price of overdraft protection, the payday cash loan usually comes out ahead. In other words, a payday cash loan can be a cost-effective way to get an emergency loan when you need money fast.Payday Cash Loan vs. Overdraft Protection
Banks don't offer overdraft services to benefit the customer. They offer these services to make money. It's a known fact that banks view overdraft protection services as a good way to increase profits. They count on customers eventually overdrawing their accounts so they can charge fees. A payday cash loan works differently and is much easier to understand.Banks also promote overdraft services heavily as a safety net. Terms can be misleading, however. A payday cash loan, on the other hand, is very easy to understand. Terms are up front and you can even call the customer service team if you have questions. Banks will often put a limit on on how much of your money is protected by the overdraft protection services. For example, even if you have $800 in your account, your bank may only cover you for $500 of bounce protection. The customer would incur a fee without realizing he or she had written a check against insufficient funds.
Overdraft protection usually charges you interest on the overdrawn amount, too. And that starts immediately! A payday cash loan will not charge you interest unless you default on the loan. You will be charged a one-time fee of about $15 per $100 borrowed, and then that's all you pay. If you default on the loan, that's another story of course! We'll just let you know that NSF fees have increased steadily since 2001 and it's not getting any better for banking customers. The average nonsufficient funds fee in New York State in 2001 was $24.83. It rises about $1 per year on average. The price of bouncing a check is creeping up slowly.
Some overdraft protection services really are a form of payday cash loan, in disguise. Although some overdrafts are connected to a line of credit or a savings account, some aren't. The overdraft incident essentially triggers a loan to you from the bank at very high interest rates. To avoid the loan situation, you can open a savings account at the same bank and connect it to your overdraft protection checking account, but you'd probably be wise to look into a
payday cash loan because the savings account will probably cost you more fees every month. After just a few months of a minimum of $5 per month to keep a savings account, it becomes more expensive than a payday cash loan.
If your linked savings account has to be used to cover insufficient funds in your checking account, you're really going to want to analyze your finances and keep a payday cash loan in mind here as well. Some banks charge an annual fee for the overdraft services. Then on top of that, if it is used, you get charged a fee for each day of the advance.
If your bank's overdraft protection services are really a form of payday cash loan, in that they give you a short term loan when you bounce a check, then you are really paying a lot. Your bank might be one of the many who charge a fee for each loan, ranging from $20 to $35. Then on top of that they can charge $2 to $5 per day until you pay back the loan. Compare this to a payday cash loan and see why so many Americans are turning to a payday cash loan when they need emergency cash.
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