Can I Get a Payday Loan if My Bank Account is Overdrawn?

For customers’ eligible for a payday loan but currently overdrawn, the advice is simple, the loan amount will act as any other payment when it hits the account. That means if you have an unarranged deficit the loan will first pay that off before your account is in the red.

We’ve all been there, money runs over and before you know it your account is overdrawn and in a deficit. What does that mean if you then want to pay a loan in?

Simple really, the loan payment acts as any other payment into your bank. That means that first your overdraft will be paid from the amount, then the rest will be shown as credit. The only way to avoid this scenario would be to bring your bank account back into balance first.

Arranged overdrafts

If you have an arranged overdraft with your bank then the payment will go into this deficit, but you will still be able to use it fully as long as you have stayed fully within your arranged overdraft. This is because the arranged overdraft does not need to be repaid, unlike an unarranged overdraft.

Choosing the best option

We have all been there – at those times when there seems no way out of the financial trouble that we have gotten ourselves into.

It is at these times that we feel like we would do anything to make the bills just disappear. And one of the things that many people do without really thinking about it is a same day loan. Although they can really help out when the times are tough, these can sometimes not be the best option at all.

Why are they called high interest loans? Well, that should be pretty obvious at this point. When you think that you have found the best option, it is great and the money is straight to your account and all is well in the world, but then the time comes to pay it back. And you have given permission to the lender, to go ahead and take out what it is that you owe them after your next pay period. So, if you did not have the money 4-weeks ago, why would you have it now that you owe even more? You see, that is the vicious cycle of what you thought would be the best option. Now that you cannot pay it back, you might consider taking out another loan and the cycle continues.

Staying in the red

So, what is the best option? At best, it is the one that you really do use to get you out of a pinch, but one that you can make sure and pay back later, so that the bill does not just keep getting higher. If you can use it just the once and for good reason then, yes, it could very well be the best option. But, if you do not realise what it is that you are getting into, then it could turn out to be the complete opposite!

Everyone seems to be running around, screaming their heads off. They want speed they say, but they also want affordability and safe passage through their bad credit. Aww fiddlesticks! If you’re serious about working your way through this current financial emergency you shouldn’t be caring about the costs or security, but the assurance of approval. Sad, but sometimes the nature of finance.

Honestly, we’re all just a bit too coddled and a bit too comfortable with our finances – not everyone can be rich and not everyone can have cash all the time. Online loan lenders do not design their products to make life happy and solve all the problems, but they’re here for when the fire gets turned up just a little too hot to keep on sitting.

Prioritise your emergency

You’re living the life, you know the ropes and you know what works. Then why are you looking for finance when they’re already everywhere spread out in front of you? The Internet – its an amazing place if you just walk around a bit and take in the view:

From out here on the open road its easy to imagine what the loan landscape would look like:

• They’d be everywhere and always open. Any reason you need a quick financial boost those loans would be there, ready to help you along.
• And they’d be fast – you need speed to cope with financial emergencies and the best loans would be the ones that reach your account the quickest.
• Most importantly though they’d be affordable – free if the cash desperate population had their way.

But that’s a hard vision to hold onto, given all the barriers standing in between all of us.

We begin to see lenders moving their business online and making their loans available 24/7. We start to actually see real financial speed in these loans – same day, overnight, one hour, instant. Is it real? Are these aspects of the landscape actually coming together? No, it can’t be…but it is! We are two thirds of the way toward the end that we can almost taste the sweet cash victory…then we come to our senses and wake up with a mouth full of roadside dust. Dang, missed another hitch.

Reality is a mother

Dang you greedy financiers! Of course, lenders are going to charge a hefty fee for instant financial aid – you need the money really bad, and their response, “time is essential to your stability.” Speed costs, but does it cost 500% APR? Indeed it does not, and until the profit margin attached to online advances settles down a lot the best case scenario for this market will continue to elude the wandering cash freaks, us proud paycheque walkers who’d rather go bust than go broke.

Spend….Spend…..Spend

In a world and economy that, to a great deal, depends on the spending habits of its’ people, it is sometimes easy to get in over our heads financially. We are constantly plied with offers for credit cards that begin as early as the high school years. Without financial experience, understanding the terms and conditions attached to these types of offers can be overwhelming.

That being said, many of us find ourselves in search of additional loans to help lessen the burden. It can be a Catch-22, but, there are alternatives in the form of financial aid, from credit unions and charities

Online loan lenders occupy their own niche in the world of lending and borrowing. They are specifically geared towards those who have a rocky credit history consisting of neglected, late or missed payments.

Your debt to income ratio is a good place to start if you are thinking of pursuing a loan. The debt to income ratio is simply the difference between the amount of income you generate on a monthly basis compared to the amount of income it takes to satisfy your monthly obligations.

What should you do if you’re overdrawn

Managing ones finances can sometimes be a skill and a failed balancing act. We all have a set amount of money and thus have to manage that amount accordingly. Going overdrawn is obviously a temporary measure, so we would advise clients to clear and settle that before enquiring about any new forms of credit.

Applying for a payday loan while also harbouring an unarranged overdraft debt is not advisable. Although in this scenario if you were to face any fees or charges for being in your overdraft, you might actually save money.

Obviously the scenario will be unique to you and this is the start of managing your money successfully.

Shopping around

It is very important to educate yourself on the companies that provide the credit desirable. In doing so, you will avoid making further mistakes regarding your financial future. Do your homework and find the solution that is perfect for your needs. When you need short term finance, make sure that you are prepared for the interest that quickly adds up with short term loans.

All different kinds of people are living payday to payday – rich people, poor people, bad credit applicants. A need for cash knows no boundaries and isn’t afraid to step on any toes. With so many different types of people looking for a personal loan, there are bound to be varying perceptions of affordability – cheap is the word that we want. But what can be cheap in the short term could be expensive in the long term. Educate youself on how the financial product works, under all circumstances.

Looking at affordability

Living in an arranged overdraft, is unfortunately the truth for some people. Look, life is transient and you are obviously not in the best position right now. This almost certainly will change.

A payday loan can be a great option if you are currently being charged in an unarranged overdraft, this scenario would be beneficial, however, most other scenarios of using a payday loan to repay overdrafts will be a temporary measure as the loan is fully repayable. Likely sooner than the overdraft would need to be repaid.

Our advice is always consistent, judge your finances accordingly, you are the best judge of what you can afford and what is best for you.

And while you’re at it, go ahead and change your perception of what’s cheap and what isn’t – looked at a certain way even the most costly advances can be seen as a cheap option. Its a question of need, of urgency, of what you’re willing to pay for this cash rescue. If you consider £X per £100 you borrow a cheap option for you (compared to the others), then it is.

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