Should you choose an overdraft or loan?

In an ideal world, no one would ever need to take out any kind of finance; but this isn’t the reality of life. There are always going to be times when you feel a little more short of cash than others and at these times, you might need a bit of a helping hand. It may be that you are behind with your rent, you have just received an unexpected urgent bill or maybe you just really need a holiday! Whatever the reasons for a financial shortfall, you are probably weighing up your options as to what kind of financial credit to opt for. There is, of course, the option of a bank loan. However, these are extremely difficult to get nowadays and you may only need a small amount of cash, so a bank loan might not be the best option. What about an overdraft or payday loan to deal with your emergency funding needs?


Payday loans

These are short term loans which are designed for those times when you need access to funds; quickly! You can usually borrow as little as £50 to as much as a few thousand pounds – depending on the purpose and how much you need. The good thing about payday loans is that you don’t usually need to pass a strict credit checking process and the funds will be deposited in your account the same day or the next working day, on most occasions. Payday loans usually have high interest rates, but if you can afford to pay it back when it is due; you won’t incur any further fees.



If you are experiencing financial issues and you need access to funds, it may be tempting to just let your bank account go overdrawn. In many cases, banks will have a facility to allow you to do this, so that you can still pay your bills. Some may even let you continue to take out cash, even when there are no funds in your account. This is great, right? How generous of them! Well, not when you start to see the fees for taking out an unauthorised overdraft! Of course, there is the option of authorised overdrafts, but these are often either not available as part of your bank account or you may not have a good enough credit rating to get access.


Choosing an overdraft or loan?

When it comes to choosing between a payday loan or allowing your bank account to go overdrawn; the payday loan may be the most favourable option. With a payday loan, the fees are transparent. It is clear how much you will need to pay back, so you are not under any delusion. However, with overdrafts, it can be a bit hit and miss. Many banks will charge as much as £10 per day for every day you are over your overdraft; which definitely adds up over the course of a month.


Benefits of payday loans

There are lots of benefits of taking out a payday loan as an emergency means of credit; as long as you pay it back on time. Payday loans can be accessed quickly and the funds are usually available in your bank account, either on the same day or the following day. You have the freedom to choose how much you want, so you may just want a small amount to cover a bill or you may need access to a substantial figure. It is at the discretion of the payday lender, but ordinarily, you would need to take out a few payday loans and pay them back on time, before you would be considered for large sums of money. Another positive of payday loans is that the criteria is a lot less strict than it is with banks, so even if you have a less than perfect credit rating, you will still be considered for the payday loan.


What to do next?

It is important to take steps to manage your financial situation, as this will save you the need to use either or any other options like these. However, these things happen to all of us – so take time to work out the best option for your circumstances and set out a budget so you don’t find yourself in a similar situation in the future.

UK Payday Loans Online Apply Now -