In terms of interest, same day loans will rarely ever beat long-term borrowing options such as credit cards or personal loans – certainly not in terms of APR anyway. This is simply down to the way in which the two are structured. Same day loans are repayable within a few short weeks, whereas you will be able to stagger repayments for long-term alternatives over a significant period of time.

However, when it comes to like-for-like comparisons between different lenders within the same market, there can also be some marked differences in the amount of interest charged. This means that taking the time to compare a few companies can be hugely beneficial if you're looking to get a good deal on your same day loan.

Equally, just because the interest might be higher on these shorter loans, it doesn't always make them more expensive than the alternative. This might sound a little illogical, but there are actually plenty of real-world examples where paying 25% on a small loan is actually significantly cheaper.

One such example may occur if you find yourself in a position where your bank account is empty and you have a direct debit due the next day. Without the cash available to cover the bill, you risk bouncing the payment or exceeding your overdraft, potentially both. After all, many banks won't allow transactions to be completed if the necessary funds aren't available. As a result you may be charged a fee for defaulting as well as a separate charge for exceeding your overdraft (as a result of the initial fee). That's a double hit which could easily add up to £40, possibly even more.

Now this doesn't even take into consideration the ramifications of missing a scheduled payment. Most companies won't take too kindly to this, which means you might well be slapped with another charge for the extra administration. Suddenly a single bill, which might only have been a few pounds, could be costing you an additional £50 or £60. That's quite a lot of money.

So, using this as a basis of comparison, if you were to borrow £100 until the end of the month from a same day lender, even at a rate of 25%, you'd only be charged £25. As well as being half the cost, it will also remove a lot of the stress and aggro that comes with defaulting payments. Don't forget that any such issues will show up on your credit file as well, so this could well have an ongoing impact on your ability to borrow money and may even push up the rate of interest you pay on existing credit cards.

This isn't to say that same day loans are a perfect solution by any means. Whilst the advertised rates of over a thousand percent may be a little misleading, paying £25 for every £100 is still more than you might expect from a conventional personal loan. This cost can prove prohibitive to some, particularly in situations where they are already struggling to make ends meet and don't have much money left over at the end of a month to cover the extra cost of borrowing.

However, in terms of speed, there really are very few other alternatives that can match same day loans. Whilst the name suggests that the funds will be provided within the same working day, in many cases the transfer is complete in under an hour. Therefore, if you are in a race against time, just as in the example above, they can really help to get you out of a fix. Just be sure to compare a few companies first so that you can get the best rate of interest available for your circumstances.