How Cash Advance Loans Measure Up To Other Financial Tools.

Payday loans can be a very beneficial financial tool over... your bank. That's right! Your bank's NSF policies work against you and can cause you to actually loose more money in fees than a traditional payday loan charges in finance charges.

"How can this be?", you might ask. Well the best way to explain this is by example.

Consider the following example. To keep it simple, we will use nice round numbers. Consider you have $100 in your checking account but you wrote four $100 checks to four different merchants. Your bank charges a $30 fee for each NSF. The merchants charge an additional $25 for each bounced check.

In this scenario, if all the checks are presented to the bank, one check will be paid and three checks will bounce NSF. You will incure bank charges of $90 ($30 X 3) plus the merchants will charge you $75 ($25 X 3) for a total of $165 in NSF fees on $300 of bounced checks. This number can easily compound if any of the merchants re-submit the checks to your bank. The $165 in fees could easily double or triple to an incredible $495 in NSF fees! If you think this is excessive, then read on. There is another option.

Now, if you had applied for a $300 payday loan to cover the three $100 checks you wrote, your finance charge would typically have been $45. Even if you have to roll over the cash advance another pay period, you still would be in a better financial situation then if you soley relied on the bank.

So when you are in a financial emergency, choosing a payday loan can definitely be the right choice.