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Is An Overdraft Better than Instant Decision Loans?
When you are look into your short term money options, you may be struggling to work out whether your instant decision loans are better than going into your overdraft. There are times when these loans will be a better option but there are also times that an overdraft can help you more.
How an Overdraft Can Help
Unlike instant decision loans, your overdraft could be paid back over a longer time period, as long as that is arranged with your bank. You can borrow what you need and make the smaller and more affordable payments. If you try to take instant decision loans for a longer time period, you will find that you have to pay large amounts of money back and that you have ruined your credit rating.
The interest rates are also much lower on overdrafts than on instant decision loans; this is because the bank will do checks in your credit rating and will know your previous financial history to determine whether you will be able to pay the money back in the time that you are saying so. If you did need the overdraft for the whole year, you will end up paying much less; there are some overdrafts that have 0% interest.
How Instant Decision Loans Are Better
However, you could find that you have a high charge on arranging the overdraft fee if you do not already have one. This is where instant decision loans come in because they can offer lower charges. This will be instead of the interest for the first month that you have the loan.
The instant decision loans can also help you to improve your credit rating, which is something that an overdraft cannot always do. The problem with an overdraft is that it can sit there for years without you dipping into it. However, the loan will be on there and then cleared in a short space of time. You will also have to state why you want the overdraft, whereas this is nothing something that you have to do for a short term loan.
You can also get the money on the same day that you apply. The benefit of instant decision loans is that you can apply in your own time and even on bank holidays. There are usually lenders working out of normal business hours. With an overdraft, you will be waiting for the bank to reopen.
Which is Best for You?
In the end, it is all about which is the best option for you. If you already have an overdraft, you could find that this will offer more benefits. You could also find that you do not need to pay the charges because you have been with the bank for so long as this is the first overdraft that you have asked for. However, you could be nearing your overdraft limit already.
If you have a poor credit history and you do need to arrange an overdraft, the fees can be high. In this case, your best option may just be the instant decision loans. At least here you can work out whether you will be approved because there are no credit checks and you will already see just how much you will need to pay for setting the loan up.