Bank Overdraft Fees Provide A Major Incentive To Get A Short Term Loans
If you have ever been in a situation where a minor oversight caused you hundreds of dollars in bank overdraft fees, then you understand the frustration that comes with this experience. Some banks reorder your purchases from largest to smallest. This means that your largest purchase of the day will post first. Then any smaller purchases will post. There may have been enough money in the bank account to cover the smaller purchases. However, because of the bank’s reordering system, you get charged a fee for every purchase. You may be able to call the bank and get some of the fees refunded. But, banks are not required to refund anything at all. If you are charged several consecutive fees, a vicious cycle may begin, making financial recovery very difficult. The large fees that can balloon and crush your bank account are one of the main reasons why their has been a large increase in online loan providers, and business that are offering cash advance finance solutions, which often are the only quick loans available for consumers in finance emergencies.
Sometimes, you may predict a cash flow shortage before the bank has a chance to charge you overdraft fees. If you have monthly payments that are automatically deducted from your account, you might notice that you currently do not have enough money to cover that payment. Therefore, you know that you need to deposit cash into your bank account to avoid overdraft fees.
You might be able to borrow cash from a friend or relative. Maybe you have a low interest credit card that would allow you access to cash. However, if these are not viable options, you do have another choice.
You have the option of taking out a short term loan to prevent overdraft charges. When used wisely and responsibly, a short term loan can be a valuable resource. A loan of this nature can save you hundreds in overdraft fees and can help you solve a temporary cash flow problem. The fee for this loan probably won’t cost you near as much as the bank’s overdraft fees as long as you pay it back on time.
The key to using a short term loan is to only borrow the money you need and pay it back on time. You could easily be tempted to go on a small shopping spree once you have the cash in your hand. You must remember that you will have to pay this money back in a short amount of time. Therefore, you must deposit it in your bank account so it can serve its purpose – to prevent overdraft charges to your bank account.
It is very important to pay your loan back on time. Failing to do so can cost you much more than the bank fees you were trying to avoid in the first place. This is because short term loans usually carry high interest rates. When seeking a short term loan, make sure you read the contract, know the interest rates being charged along with other fees, and make sure you know when repayment is due. You should ask the loan representative to clarify anything that is unclear to you. You will be able to make an informed decision regarding the loan with proper knowledge.
Once you receive the cash, take it directly to your bank for deposit. If you’re depositing cash, most banks will make it immediately available which means the cash will cover any incoming charges that would otherwise have triggered an overdraft charge. Constantly remind yourself of the date that repayment of your loan is due. Make sure you have the funds available to pay it back.