Financial emergencies can strike at any time. Whether it’s a leaky roof, a car that needs repair, or a pet that requires medical attention, day-to-today problems can temporarily hurt anyone’s monthly finances. While most loans have a lengthy approval process and require good credit, a payday loan may be a solution.
A payday loan is a short-term, high-interest loan designed to help people navigate tricky financial situations. Loan applicants can borrow anywhere between $120 and $1,500 through a simple online process.
Interested in applying for a payday loan? Here is what to know.
How to get a payday loan online
The application process for a payday loan online in Canada is easier than most people think.
Start by researching a reputed lender who is licensed to issue payday loans in one’s province. Read reviews and testimonials that talk about the experience other borrowers have had. Take note of any eligibility criteria the lender has. Most payday lenders will require loan applicants to be at least 18 years old and have a stable income.
After choosing a lender, gather the necessary documentation. Most lenders will require a government ID that clearly indicates their age as well as verifiable income. The next step is visiting the lender’s website, creating a profile, and requesting a payday loan.
Potential borrowers will need to fill out an online application form and attach digital copies of supporting documents. They must also submit a pre-authorized debit form which enables the lender to withdraw the amount borrowed plus the fee they charge for issuing the loan.
Payday loans do not require applicants to have a certain credit score, making them accessible to many people.
After submitting the online application, borrowers will receive the funds through a direct deposit. Typically loan processing and disbursement for payday loans happen the same day, so many payday loan borrowers receive same-day funds.
Can people get payday loans offline?
Yes, many payday lenders have brick-and-mortar stores where borrowers can fill in an application form, submit documents and receive funds the same day. In-person, lenders will request a blank, voided cheque that they can use to withdraw the loan and fee from the borrower’s account on their next payday.
What to know about payday loans
Payday loans are easily available to most people since they don’t have credit score requirements. That said, a payday loan application may be rejected if the applicant already has one unpaid payday loan. Most lenders will issue just one loan at a time.
Additionally, payday loans have a borrowing limit of $1,500 in Canada, making them unsuitable for someone looking for a bigger loan. Applicants looking for an installment-based repayment plan can consider other types of loans instead.
It’s also important to remember that payday loans must be repaid in full on the borrower’s next payday. If not, lenders will tack on additional fees and interest.
The bottom line
Payday loans can help those with poor credit or no access to other forms of borrowing get through an emergency. Loan applicants should remember that payday loans should be used only for short-term financial help and should not become a regular source of income for any borrower.