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Which is Better: Overdraft or Same Day Loans?
When you are looking for ways to borrow money, you may constantly hear about using same day loans as a last resort. The problem with this is that you may be stuck on what to do before had. There are different options available and one of those is your overdraft. It is worth considering the differences between your overdraft and the loans to help you make your decision.
Pros of the Overdraft/Cons of the Same Day Loans
The main benefit is that you can spread your payments over a few months, rather than needing to pay back the total amount like you would with the same day loans. If you are lucky enough, you may even be able to find an overdraft with zero percent; even if that offer is just for the first £300. This will help you pay back less over the longer term.
By paying back over a longer period, even if it is only an extra month or two, you can borrow a little more than you usually would. This will often help you in the worst of emergencies. When you take the same day loan you will need to pay the full amount back at the end of the month so can only borrow the amount that you can afford.
It can be easy to overstretch your budget and apply for more loans than you really need. This will do a lot of damage to your credit rating because you will come across as a high risk. When you have your overdraft, it is a buffer for emergencies and you are not constantly taking out more debts to afford everything.
Cons of the Overdraft/Pros of Same Day Loans
However, overdrafts are not the greatest option for borrowing money, especially if you do not currently have one set up. There are fees to approving overdrafts, which are usually more than same day loans. It is worth comparing the two prices to get the best offer for you; you may find that your bank is willing to waiver the fees if you do not usually ask for the payday advance.
A benefit to taking the same day loans is that you will not need to go through credit checks. You just need to meet requirements, which you can check on before applying for the loans. This makes it possible for almost anybody to get the money that they need. Banks will often do checks into your credit history to make sure that you will pay the total amount back, which can prevent many people from getting the money that they need.
Another benefit to taking a same day loan is that there are no questions asked. This can often mean that your credit rating is protecting. You can also do more improvement with your credit rating than you can with an overdraft because you will not constantly dip in and out of it and you will pay the full amount back at the end of the term.