Payday loans and Banks

Payday loans offer a way out for cash strapped consumers. So why would banks hate payday loans?

First, payday loans are fast personal loans that you can get with little qualification requirements. You can get a payday loan in as fast as 1 hour.

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No brick and mortar bank is going to hand you cash in 24 hours, just because you tell them that you have a job and a checking account. Think of the process you have to go through to open a checking or savings account. You walk into your neighborhood bank. You stand in line for about 15 to 20 minutes. When it's your turn, you sit down with the nice bank representative, who gives you a two to four page application.

The fact is, no bank will give you an unsecured personal loan in such as short period. In addition, if you have bad credit, you can forget about it. Payday loan lenders on the other hand, can provide from $100 to $1500, even if you have bad credit.

So what's the catch?

Payday loans have high interest rates. The key to winning the payday loan game is to get the loan and pay it back immediately. This is the best case scenario. You don't have to beg other people for money, you can get a loan and simply pay it back.

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The second reason that banks don't favor payday loans, is that, you can get a loan to avoid overdrafting your bank account. Banks love it, when you overdraft your account. It's the quickest $35 to $50, they'll ever earn. They would rather, you overdraw your account than take out a payday loan to avoid overdrafts.