Top 5 Benefits of Payday Loans in Canada
By Briana Dudley
For many people in Canada, identifying payday loan benefits isn’t always easy. It’s understandable since short-term credits like payday loans aren’t always the best solution for everyone’s financial problems. In fact, a payday loan is designed purely for the short term. Most lenders also offer it with higher interest rates compared to many other forms of borrowing.
It’s recommended that people only use reliable payday loans in Canada for emergencies. It shouldn’t be an option for regular borrowing. It’s important that people also know exactly when and how they’ll be able to pay the borrowed money back. However, despite these considerations, payday loans often come with advantages that make them useful for consumers in specific circumstances.
Below, you’ll find the top 5 benefits of taking a payday loan in Canada.
What Are Payday Loans?
Before tackling the benefits that a payday loan brings to borrowers, it’s important to understand what this type of credit is really all about.
So, what are payday loans? They’re short-term loans that should be repaid when the borrower’s next salary arrives. Whether you go to your local payday loan lender or opt for online lenders, they’ll usually ask you to sign a contract that states you’ll need to pay back the cash loan in one to two weeks. In exchange, you’ll get the money you borrowed plus an additional financing charge.
Typically, this short-term loan will take you one week to pay back, but lenders can ask for the payment in two weeks, sometimes even as little as two days. Usually, you’ll have only a few days or as long as your next payday to pay back the money you borrowed. If you’re making an average wage, you can expect to have to pay the full amount before your next payday. That being said, you really shouldn’t have any problems paying this type of loan. The only thing that might be a problem is if you have a poor employment history.
Payday loans aren’t something you should consider unless you have the financial means to pay the entire amount back as scheduled. Failing to repay the loan will only put your credit score at risk and cause more financial troubles down the road. Also, prepare to deal with higher interest rates, higher fees, and even higher payments to pay off the loan. If you have a very poor credit rating, it would be in your best interest to find a company that offers no-charge payday loans instead of risking your credit score.
Despite the risks, payday loans still come with advantages, which include the following:
1. Payday Loans Are Quick And Convenient
Payday loans can work really well if you know what you’re looking for. They generally work best for those who need money fast. That’s because the entire process can be done in less than 30 seconds. Usually, payday lenders will check your income with a bank checking account and verify the details with you. They then verify your credit score to see your ability to payback. If they’re satisfied, they’ll approve your application and the amount you wish to borrow.
Getting a payday loan isn’t hard to do and can actually save you a ton of time, frustration, and worry. It’s important, however, to work with your lender and find the best deal possible. It’s essential to note that most lenders give better deals for borrowers with a good credit history. Also, you should know the best time to apply for a payday loan, which is always right before payday. And last but not least, you must follow the terms of the loan.
Payday loans also come with a convenient loan process. All you have to do is fill out the online application form and submit it, and you’re done. When you get your check, you may not know if it’s enough to cover your debt. However, if you plan well and take your time, you may be able to get by with just the extra money you receive from a payday loan.
It’s quick and easy to apply for and receive your loan, which can save you both time and money. This type of loan gives you a lower interest borrowing option, allowing you to take care of your bills and pay off any other debts you currently have.
2. Fewer Requirements To Qualify
The biggest benefit of payday loans is that there are very few requirements that you must fulfill in order to qualify. The majority of companies that offer payday loans will require you to have good to excellent credit. Many companies also will require you to have a regular job and an annual salary of more than $40,000.
Most payday lenders also require that you be 18 years old and are legally able to work in your state. Once you’ve met these requirements, you’re ready to apply for your loan. Note that other lenders may also require that you have an address in Canada. However, such a requirement is waived if you apply for a payday loan through online lenders.
3. Easy To Manage
Unlike other types of loans, payday loans can be easily managed, even with poor credit, and don’t carry a risk of losing your money. There’s no hard credit check, and, therefore, no need to put your personal financial records at risk. That’s why payday loan services are so popular. Because they’re convenient, they give borrowers more time to pay back their loan, thereby increasing their chances for success with repayment.
Because these loans are short-term, there’s no need to worry about paying the money back for a longer period than necessary, and therefore there’s less chance that the borrower will default on the loan in the future. Also, these loans are offered on an instant basis. Most importantly, since you’re able to manage your finances easier, you can make sure that you’re getting the maximum benefit from the loan by paying off the loan as soon as possible.
4. Lower Interest Rate
A typical payday loan is actually a short-term loan offered to people who need a little extra cash fast to make ends meet to pay for an emergency or buy an expensive item. Usually, the amount borrowed is much smaller than traditional personal loans, often no more than a few hundred dollars. The interest rate on payday loans is generally lower than normal, so most borrowers pay their payday loans off much faster than their usual monthly minimum payments.
5. Anyone Can Apply Regardless Of Credit Rating
A payday loan is designed with the borrowers in mind; not only are they intended to help people who have a poor credit rating, but also those who have good ones. So, if you have credit scores that are below the average, it’s highly likely that you can still obtain a payday loan. For people with very poor credit, though, applying for the loan online is usually the best way to be approved. Anyone can apply regardless of credit rating as long as they’re able to provide proof that they have a steady and reliable source of income.
However, it’s still important to review your credit report to make sure you don’t have any outstanding debts or past due accounts that will increase your chances of missing payments. If you do have these types of issues, you may want to work on clearing them up before you consider getting a payday loan. By doing so, you’ll be able to ensure that you can be responsible for paying back the loan on time every month.
Payday loans themselves can help improve your credit rating, though. Since the repayments are easy to manage and the loan usually comes with a lower interest rate, you can be sure that you wouldn’t be defaulting on the loan. As a result, your credit rating improves, giving you the chance to get any type of loan in the future without a lot of hassle.
Traditional Payday Loans Vs Payday Loans Online
Many people are looking into the possibility of taking out payday loans online. That’s because these types of loans can be accessed with an online application. However, others are concerned about whether or not it’s actually worth it. Let’s attempt to answer the question, “Are payday loans online any different from traditional loans?”
The truth is that online loans are easy to get because they can be applied for instantly. You can apply for online loans at any time of the day, every day, from the convenience of your own home. There’s no need to drive to the nearest office of the lender; all you have to do is fill out an easy application form and submit it. Most online lenders will even allow you to apply with no credit history at all. That’s why online lenders are usually recommended to borrowers with very bad credit.
So, are online payday loans worth it like a traditional payday loan? This post thinks that’s certainly the case. In fact, an online payday loan may even be a better option than the traditional one. The choice, however, still depends on an individual’s preference.
The Bottom Line
Payday loans in Canada are a convenient and quick way of handling financial emergencies. Even with no collateral, you can access cash within hours. People with bad credit are even welcome to apply. As long as you repay the loan amount with your next salary, you can borrow money and use it for any purpose. Keep in mind that paying a payday loan on time is very important, not only to avoid penalties, but also to protect your credit rating. Nevertheless, payday loans are generally a good borrowing option when handled properly.
About the author:
As a blogger with more than ten years of experience in the industry, Briana Dudley has successfully gained the loyalty of thousands of readers worldwide. Briana regularly talks about finance and lifestyle on her blogs and guest posts.