Costs of Bouncing a Check vs. Using a Short Term Loan

Costs of Bouncing a Check vs. Using a Short Term Loan

Costs of Bouncing a Check vs. Using a Short Term Loan

If you’re in a financial pinch you might be considering whether to simply bounce your check or obtain a short-term loan. You might be wondering if there’s much of an impactful difference between the two options. The short answer is, yes, there is an impactful difference, and it’s a much better bet to go with a short-term loan.

At Lending Bear, we understand that life happens, and people can find themselves in stressful financial situations. In this guide, we’ll discuss the costs of bouncing a check vs. using a short-term loan to help you make an informed financial decision.

What is Bouncing a Check?

The term “bouncing a check” refers to writing a check that a bank cannot process due to insufficient funds, at which point the bank sends it back unprocessed. Bouncing a check often happens inadvertently when the check writer is unaware that they don’t have enough funds in their account to clear the amount written.

Sometimes, people write checks for sums they don’t have when in financial distress. This may happen, for example, if someone is trying to get groceries without sufficient funds, and knows that they will be able to get the groceries they need before the store deposits the check. However, this method of coping with financial stress can have consequences.

What are the Effects of Bouncing a Check?

Writing a bad check can result in several consequences, ranging from minor to severe. These consequences can include fees, credit score impacts, ending up on a bad check database, merchants not accepting your checks, and criminal charges.


Bouncing a check often results in fees from your bank and the receiving bank. This fee is referred to as a Non-Sufficient Funds fee (NSF). In some instances, the receiver of a bad check, such as a grocery store, can also charge a fee for a bounced check. Your bank may cover the amount and let the check clear, but you’ll likely have to pay overdraft fees in addition to repaying the bank for the check amount.

Credit Score

Your credit score can be impacted by writing a bad check. If you fall behind on repaying the fees or amounts for your bad check(s), your credit score can be affected. If the check that bounced was for a loan payment, then it’s likely your credit score will be affected.

Bad Check Database

If you write a series of bad checks, your name and information may end up on a bad check database, such as ChexSystems. These databases share information on bad check writers with financial institutions. This can result in you having trouble opening future accounts with other financial institutions. Based on your history, merchants with this information may also not accept checks from you.

Criminal Charges

If you repeatedly and intentionally write bad checks, you may end up facing criminal charges, such as fraud. These charges can result in significant
fees and jail time. This is certainly a severe consequence that you’ll want to avoid by not intentionally writing bad checks.

Obtaining a Short-Term Loan

Obtaining a short-term loan is a much better option than writing a bad check. When you get a short-term loan from a reputable lender, you’ll be fully
aware of the terms and can make a viable plan to repay the loan. As long as you pay on time, your credit score can be improved after getting the loan and you’ll be able to maintain good standing with your banks and merchants.

The interest rates that come with a short-term loan are not low, but they are often less than the amount you’ll pay in various fees from writing a bad check.

At Lending Bear, we work with borrowers of all types, including those with bad credit. If you’re looking for a way to get the cash you need quickly and have bad credit, we offer a variety of loans such as payday loans, pawn loans, and title loans.

We follow best practices for lending, have over 5,000 5-star reviews, and have an A+ rating with the Better Business Bureau. Rather than writing a bad check, and risking the various resulting consequences, consider working with a highly reputable lending institution. We can help you get the cash you need without the negative effects of a bounced check.

Contact the Pros at Lending Bear

At Lending Bear, we know that tough, unexpected financial situations can happen and we’re here to help. Make a sound financial decision- rather than writing a bad check, contact us today about obtaining a short-term loan.