Savings Account PayDay Loans Cater to the Rest of Us

[Mar 30, 2009.]

 

Let’s face it. Not everyone has a checking account. As hard as that may be to believe, it’s true. Some pay bills with cashier’s checks or money orders. The money that they do bring to the bank goes into a savings account, never to be touched except in extreme emergencies. That’s why savings account payday loans are so beneficial. It works for those who don’t bank regularly but still need the collateral to apply for as payday loan. And those that have a checking account but don’t want it tied up with payday loan ramifications can benefit as well.

It Depends on What You’re Talking About
According to the Banklady, the savings account payday loan phenomenon provides over 65 million payday loans each year in the United States. The figure might be due in part to the percentage of the population without checking accounts and the percentage that would rather connect payday loans to their saving accounts. Which leads us to defining the savings account payday loan:

• Savings Account Secured. When payday loans are connected to a savings account as a means to mediate the risk. Once signed, the loan effectively draws repayment funds out of the savings account when the bill is due.


• Savings Account Deposited. Some savings account payday loans are called so because the funds from the loan amount are deposited directly into savings.

Using Your Savings without Breaking the Bank
Your savings account can be flexed several ways to increase your buying power. First, the FTC encourages you to connect savings overdraft protection on your checking account, if you have one of those. This will save you in bounced checks, if you write any of those, by keeping your savings pool available for “overflow”.

Next, allow enough money to build up in your savings to cover at least three months worth of expenses. This is easier said than done. But once done, you’ll experience a sense of relief at the cushion. It even encourages you to save more every month. If you are expecting a substantial tax return, putting the proceeds into savings is almost like receiving an instant nest egg.

Finally, if you must take advantage of payday loan offers, connect them to your savings account, particularly if you have no other account with which to collateralize the loan. If you do have a checking account, this action will ensure that a sudden withdrawal of payback funds doesn’t interrupt your normal bill pay activities.

 

About Author:

Kelly Richardson is a freelance writer, marcomm consultant and digital entrepreneur. He’s written content for Fortune 500s Google, Yahoo!, Microsoft and Wells Fargo. Find out more about him at kellyrichardsoncopywriting.com.