We have written extensively about the problem of cash advance loans and how the business charges rates of interest of 500-1000% from customers who often cannot afford to borrow money somewhere else. The industry is well controlled in a few states and ignored in others, but one thing remains constant - customers take out those high interest loans because they wish to. No one forces them to do it and the lenders are required by law to fully disclose the terms of the loan ahead of time. In short, the individuals, for better or worse, understand what they are buying.

That’s not necessarily the case with overdraft loans or overdraft “protection” as it is frequently called. Many banks now include such protection as a built-in feature of their checking accounts. If a customer writes a check or makes a debit card purchase for more cash than he or she has in their account, the bank will recognize the transaction. The customer will then be billed a fee for the overdraft. The fees vary from bank to bank, but typically range from $20-35 for each transaction. A $35 fee, repaid in two weeks’ time, amounts to 910% interest annually. If the customer repays within a week, the effective annual rate of interest is an unbelievable 1820%. Compared to such rates, payday loans are cheaper.

The ability to draw more cash than you might have in your account is useful, we suppose, especially in light of the fact that few people ever balance their checkbook correctly. That being the case, few individuals know how much money they are supposed to have in their account, making overdrafts all the more probable. The problem is that banks instantly include this protection feature and don’t permit customers to “opt out” of it. Furthermore, the customer gets no alert if he or she is about to overdraw their account. It just happens, and the fee is automatically assigned.

This is lucrative business for banks, which takes in more than ten billion dollars a year in overdraft fees alone. This is lucrative lending, but unlike quick cash loans, customers don’t usually realize that they are even borrowing cash. If they did, they might be less likely to do so, especially if they knew that overdrawing an account by $5 still requires a $35 fee. Would anyone  take out a $500 cash advance loan if the fee were $700? Probably not.

In an perfect world, banks might be required by law to notify customers that such protections are in place. They would also be required to allow customers opt out if they elect to do so. Given the current climate in Washington and Congress’ rather favorable view of the banking and lending industries, it appears unlikely that any laws along these lines will come along any time soon. For the time being, we recommend that customers maintain their checkbooks a bit more diligently.

Do you have terrible credit? I bet with terrible credit it’s tough to get a loan, right? But do not worry, there are places where you can go to get a loan even with poor credit. The three that I love are fast cash loans, cash advance loans and personal loans. The reasons are the same why I love these, but also different in a way. I like them because they are there when you need them.

The best personal loan for people with terrible credit is a just that, a personal loan. But I don’t mean a personal loan from a financial institution , I am talking about a personal loan from a friend or family member . These are much better than anything you can find at a bank because they don’t charge interest and they are more understanding if anything were to happen where you wouldn’t be able to pay one month’s payment.

The next best personal loan is fast cash loans. A fast cash loan is when you pull cash out of your credit cards for a short time. I would only suggest taking cash out of a credit card if you can pay it all back within a few months, but preferably within the first month. If you can pay the money back in the first month then you won’t get charged any interest on the money that you just were lended .

And finally cash advance loans. The reason cash advance loans are at the end in this list is because the other two make more financial sense if you are able to get cash that way. But for the others who do not have family and friends that can lend them the money and who don’t have the extra cash on their credit cards then cash advance loans are fantastic .

So now that you know where to go and get a loan even with bad credit you should never be in a jam.

When you need money immediately for an emergency expenditure, a cash advance can provide a fast solution to getting the money you need. There are many benefits and some downsides to getting a payday loan; however, by looking at the pros and cons you’ll be able to determine if its right for you.

Benefits

The main reason why payday loans are so popular is because they are not difficult to be approved. Payday loans  are extremely easy to be approved. Many lenders do not perform credit checks as a requirement for funding a loan. In lots of cases, all you need in order to get a funded loan is to have a job and be a US permanent resident that is 18 years or older.  Payday Loans are unsecured loans that are most often paid back within 30 days. Most states regulate the amount and interest rates for cash loans. Most loans range between $100 and $1500 depending on income and state requirements. There are a some states that outlaw cash advance loans, but most states allow them.  Another major advantage of payday loans is that they are paid out very fast. If you go online, you will see companies that advertise being able to get a funded loan in as little as 1 hour. The truth is that approval is very fast and many can send the funds to your bank account by bank transfer same day; however, it should take about 1 day for it to appear in your bank account. Even if you have to wait 1 day, it’s a lot quicker than trying to get a loan at a bank.

Cons

Although payday loans are very accessible to get, the interest rates on them are high. Many lenders will charge $10 to $20 for every 100 dollars that you borrow. If you urgently need the money and can pay it back within your next pay period, it might make sense; however, cash loans are not designed to be taken out if you need a long term loan. One disadvantage to payday loans is that you must provide a backdated check so the day the money is due; the lender tries to automatically deduct the money out of your bank account. If you’re unable to pay the loan when it is due, late fees can add up.

The Verdict

If you need money quickly and can’t get a traditional loan, a payday loan will get you the cash quickly; however, remember that it is a short term loan that must be paid back within 30 days.  Before applying for a loan, you should ask yourself if the need is worth it and are you able to pay it back quickly. If you’re looking for more options, consider bad credit personal loans.  The benefit is that you’ll be able to qualify for a loan even if you have no credit, and the repayment period can be longer.