How do different kinds of loans stack up?

Payday advance loans are designed for people who need an infusion of cash quickly. But how does it stack up when compared to other options? Alongside bank overdraft fees, maxing-out credit cards, bouncing checks, and non-sufficient funds charges, payday advance loans can be a the winner.

Bank Overdraft/Non-Sufficient Funds

 These types of fees are very closely related. They both happen when someone tries to withdraw funds from an existing bank account, but there is not enough money to manage it. There are generally two ways this happens: either writing a check that bounces, or using a debit card.  Unlike payday advance loans, these charges have no government regulations controlling their size or requiring their fee structure to be transparent. Depending on the charge by the bank and the amount overdrawn, you could end up paying an APR in the thousands.

Maxing Out A Credit Card

 When someone charges more to a credit card than the allowable balance the penalty can include interest fees as well as the actual purchase price, which is part of why it can be hazardous to float close to a credit limit. A standard overcharge fee,  may be charged for every statement received when a customer is over the limit. This can be charged without the credit card owner’s knowledge and on very small overages. Like overdraft fees, a person can easily end up paying thousand percent APRs.

Bouncing Checks

When a check is written and there is not enough cash in the account the consequences can be more than just monetary, there is a possibility of jail time.

This is considered a form of fraud. In addition, there are fees assessed for the bounced check and further charges if you also caused your account to become overdrawn or have insufficient funds. This can become very costly.

Payday Advance Loans

A way to get the cash you need based on your current job and payment history. Payday advance loans are a credit-independent source of funding. Approval and payment can often happen within a day of application or less. Payment is based on principal and a simple interest rate, negotiated at the beginning and made clear to the customer in advance. In addition, payday lending is regulated by government disclosure requirements. None of the other methods mentioned above are subject to any kind of restrictions or oversight like this.

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