Is a Payday Loan Best if I need Money Fast?

If you need some money in a hurry and need to borrow it, then there may be very few options available to you. As a payday loan is quick to organise then it could be a good option but there may be a few others that you could consider as well.

Credit card

If you have a credit card then this can be a very convenient way to get some extra money. However, a credit card is limited in what you can use it for. You can use it to buy things in shops but it may be that you need to pay a bill or need cash. You can draw cash from a credit card but it works out to be very expensive. There can be a charge to do this at an ATM and you could also start being charged interest on the money right away, so it is expensive. If you are paying a bill, then they may not accept a credit card or they may have a charge to use one. Also, you may not have a credit card and if you have a poor credit record then you may not be able to get one. If you can get one, it may take too long for it to come through.


An overdraft is where you draw more money from your current account than you have and therefore then borrow money from your bank. Some people will have arranged an overdraft with their bank and have what is called an authorised overdraft. This will allow them to borrow up to a certain amount. They will still get charged but it will be a lower amount than if they borrow without it being arranged. This sort of unauthorised overdraft can be really expensive. There will be interest and charges and therefore this can be a very expensive way to borrow money. It is available right away and you should be able to draw it as cash or transfer it to another bank so it can be convenient. If you do not have a current account, then it can take time to open one and so this may not be a quick enough option.

Payday loan

A payday loan can be arranged within a few hours so it is almost as quick as an overdraft or credit card that have been arranged already. You can borrow anything from a few hundred to a thousand pounds. You will need to have a bank account and an income as you will need to set up a direct debit to repay the full loan plus charges on your pay day. This will help to ensure that you have the money available to pay it. As payday loans are set up to help those with a poor credit record, they do not do a credit check so if you have no credit card due to a poor credit record then this could be for you. They do charge quite a bit, because of the risk that they are taking on, but it may not be more than the overdraft or credit card depending on how long you take to pay them off. If you do not have a current account or an income then you may not be able to get a payday loan. Sites like Cobra Payday Loans are a good starting point if you’re looking for a reputable short term lender.


So there are quite a few things that you need to compare when you are deciding whether a payday loan is best when needing a quick loan. If you have access to a credit card then this could be even quicker but it may be expensive, particularly if you need cash and may not be any good if you want to pay a bill or transfer money. An overdraft could also be quicker but could be a lot more expensive than a payday loan. It may be that some options are better for fulfilling your need than others and that some are not available to you because of your current credit status. It is therefore worth seeing what is available to you and being careful with your choice if you have options. Think about the advantages and the consequences of each one. Once you have decided which loan type to get make sure that you compare lenders within that loan type to get the one that looks the best for you. That could be the one that is cheapest but there are other factors that you need to think about as well such as what you think of the lender, what their reputation is like, what their customer service is like and things like that. It is not an easy decision to make as there are so many factors to think about. It is worth considering what is most important to you and that will help you to make the right decision.

Is a Payday Loan Better than an Unauthorised Overdraft?

If you need money quickly then it is worth comparing your options before just borrowing form the first place that you think of. There are lots of options that you could pick from, even if you think that you will not get a loan and it is worth comparing them. For example, you might just go for an unauthorised overdraft rather than considering a payday loan and it is worth comparing the two so that you can see which will be the best for you.

What is an unauthorised overdraft?

An overdraft is when you are allowed to borrow money form your current account. It means that when you have this account and spend more money than is in there, you will be overdrawn. Many people are offered an overdraft facility with their current account which will have a limit, perhaps at £1000. They will then be able to borrow money up to that amount and pay agreed charges for that. It might be that you pay interest on it and a monthly charge, for example. The amounts and types of charges will vary. If you have an unauthorised overdraft it means that borrow more than you have been allowed. This might be that you go over that credit limit of £1000 or that you do not get an offer of an overdraft at all. An unauthorised overdraft is very much more expensive than an authorised overdraft. How much you get charged specifically will depend on the lender. However, you will find that it will be a lot more expensive than an arranged or authorised overdraft. The actual cost will depend on how quickly you manage to repay it, how much you borrow and how much your bank charges. The overdraft will be repaid as money is credited into your bank account.

What is a payday loan?

A payday loan is a way to borrow anything from a few hundred to a thousand pounds. It does not require a credit check and can be organised in a few hours and so is ideal for anyone who needs money in a hurry. As there is no credit check it can be a good option for anyone with a poor credit record that may not be able to get another loan. The loans have to be repaid within a few weeks and so they will not last very long. You do have to normally repay it all at once, so finding the money can be tricky. This is why the repayment date is always your payday. It means that you will have money available to pay it. However, you then have to manage for the rest of the month with a lot less money which can make it tricky to afford. A payday loan tends to have the reputation of being expensive as well. If you repay it when needed then it will be cheaper than if you miss the repayment or do not make a full repayment when the costs will start rising.

Which is better?

It can be quite tricky to work out which is better and even comparing costs can be tricky. The cost of a payday loan is straightforward to calculate as long as you are sure that you will repay it on time. However, if you do not repay it on time there will be additional charges and how much these are will depend on whether you repay some of it and how long you leave the rest unpaid. The overdraft is equally difficult to calculate as it will depend on how long it takes you to repay the debt and whether you repay it all at once or bit by bit. An overdraft can be dearer than a payday loan but if you compare loans/overdrafts and borrow from one of the cheaper lenders then this may not be the case. Repayment may be an easier factor to consider. With a payday loan you will be expected to repay it in one go and that can be difficult to manage. However, with an overdraft you will repay it as money goes into your bank account. You may find that easier as there is no pressure to repay it but as you get money it will automatically repay it so you do not have to think about it.

You may also find other factors could help you to decide which to use. You might need more money than you can get from a payday loan as they will determine how much they lend you on whether you have had a loan before and your income. You might like the look of some lenders over others. It might be quicker to use one sort of loan over another, depending on what is available to you. You may have heard bad things about one sort of borrowing and that might put you off. There could be all sorts of influences which you need to consider.