It’s no secret: payday loans have increased in popularity over the last few years and continue to do so. In fact, less than 2% of Canadians turned toward a payday loan in 2009, compared to 4.3% in 2014, and this trend has continued into the last three years.
Payday loans have several advantages and can offer a solution to a vast number of people, notably those with low or poor credit ratings. No matter your current financial standing, however, it’s important to understand what payday loans are and how exactly they could help you. Being properly informed may assist you in making crucial borrowing decisions in the future.
Six Reasons Payday Loans Are In-Demand
As the terms “payday loan” and “cash advance” begin to show up more and more, you may be wondering if their popularity is on the rise. Well, the answer is yes and there are plenty of reasons underlying such an increase. Here are the top 6!
- No Long-Term Contract
In most cases, payday loans are short-term, averaging about two weeks in length. Although interest rates are somewhat higher than those found at a financial institution, if you successfully pay your loan back within the given timeframe, you won’t have to spend much extra on interest. When borrowing from a bank, you may have a longer period for repayment, but interest can quickly become costly. Due to the short contract offered through a payday loan, it’s also easier to respect the repayment plan. In other words, a short-term contract is likely to help you save on interest and thus pay back what you owe by the due date or even sooner.
- Ease of Application
When it comes time to choose a secure payday lender, having different options is far from being an issue. All you have to do is search for “payday loans” online, and you’ll be able to apply for your loan from the comfort of your own home without ever getting into your vehicle. Everything can be completed online, from the initial steps of application to actually receiving the funds upon approval. Moreover, applying for a payday loan online is extremely quick, only taking an approximate 20 minutes. The loan application process has never been easier or faster, saving both time and energy while making this borrowing option even more enticing!
Trusted Canadian Payday Loan Providers
Feeling a little overwhelmed with all the possible loan providers and aren’t sure how to find a trusted lender? There are a few things you can do to ensure that you’re applying with the best lender for you.
– Make sure they’re a licensed lender. By applying with a licensed lender, you’re ensuring that the lender uses safe and legal ways to collect your money, and you avoid falling into a scam altogether. Furthermore, you can rest assured that they are direct-lenders and not simply selling your information to third-party lenders.
– Take a look at the different interest rates. While browsing from one lender to the next, make sure to note the interest rates they offer and always keep in mind that the most a payday loan can charge is $15 per $100.
– Verify repayment options. There are two legal ways to collect money owed on loans. The first is through pre-authorized debit, where the lender retrieves money from your bank on a previously agreed upon date. The second is through a post-dated cheque, where you provide the lender with a cheque to be cashed in, equally on a previously agreed upon date.
– Read your loan agreement. Before signing anything, always make sure to read your loan agreement carefully and thoroughly – including the fine print.
- No Credit Check
Simply put, you can get approved for a payday loan even if you have a low or poor credit score. In most cases, a bad credit rating will prevent you from successfully obtaining a loan from a traditional banking institution, which makes a payday loan an interesting option. Keep in mind that the term “no credit check” doesn’t mean your lender doesn’t make such verifications. Payday loan lenders simply have lower acceptance standards and base themselves on different criteria, such as salary, instead of credit score.
- No Waiting
There’s literally no faster way to receive loan funds. Once approved, most borrowers see their money deposited within 24 hours, and it isn’t rare for the transfer to be received in much less. When it comes to a bank loan, most require a minimum of 3 to 4 business days before sending the money, even after being approved, which is already a lengthy process in and of itself. When facing a financial emergency that can’t wait, payday loans are definitely the way to go.
- No Usage Restrictions
Whether it be for an emergency like a sudden car repair or for something you want like small home repairs, you might not necessarily want to disclose why you need a loan. A payday loan doesn’t impose any usage restrictions, and you don’t have to specify your reason for requesting the loan when applying online, unlike with a traditional financial institution.
- Reasonable Interest Rates
You’ve probably heard it time and time again – payday loans have bad interest rates. However, this isn’t necessarily true as many lenders actually offer reasonable rates, you just have to do a little searching. Keep in mind that the better your financial situation is (including your credit score), the better rates you’ll obtain, but even someone with a lower credit score can find a fair deal.
Needing a small loan is nothing to be ashamed of and payday loans are there for just that. Payday loans range anywhere from a couple hundred dollars to a couple thousand and can help get you out of a tight financial bind. If you’ve decided to take the step and apply for a loan, keep this information in mind to ensure things go as smoothly as possible!