Payday loans in BC
There comes a time when you are in need of some extra money, whether it’s for sudden repairs, an unexpected health issue, or some other reason. Taking a loan from a bank can be a long and lengthy process and not the best option when you need money on an urgent basis. That is where payday loans come into the picture. With a payday loan, you can come out of a tough money-related situation in a quick manner. An ideal payday loan is the one that can fulfill your needs and at the same time, you can afford to pay it back. Usually, a payday loan is repaid in one payment on the payday of the borrower or when another source of income comes in, for example, a pension. Payday loans have a quick application process, where you have to complete a few easy requirements. Once you are done with all of the necessary requirements, your checking account will receive the quick deposit and you will have the money you need. Therefore, if you believe that you can pay back a payday loan on time without any trouble, then it is a quick and suitable option for you when you are in need of some quick money. Want to know more about payday loans? Read on to find out.
What Happens If You Don’t Pay Back A Payday Loan in BC or in Canada?
Payday loans are still loans, meaning you have to pay them back one way or the other. There are several options available to payday lenders, which ensure that they will get their money back. The majority of them utilize the automatic withdrawal option, where the money gets taken out from the borrower’s bank account automatically in order to recover the loss of the payday lender. Moreover, if the borrower does not pay back the money and does not bother contacting their lender, then the lender will be forced to take one of the following actions:
- Certain lenders will be forced to extend the loan and charge the borrower a fee. Whenever the borrower misses their payment, their loan will get extended.
- Some lenders will send the borrower letters as a reminder.
- Sometimes they will directly call the borrower if the borrower hasn’t contacted them yet.
- Sometimes they will contact the references a borrower used in order to apply for the loan.
Also, there are times when the bank of the borrower will not allow the lender to withdraw the payments from the borrower’s bank account. In this case, the lender will divide the payments into smaller amounts and try again. However, each fee might result in additional charges against the borrower, by both the lender and also the bank.
Can You Get PPI On Payday Loans?
Even though getting a payday loan is a great idea if you are in need of some quick money for any emergency situation, they can cause some distress in certain cases. Firstly, payday lenders have a certain responsibility towards their clients. That is why it is their job to always make sure that the loan the client is taking is affordable, and that they will be able to pay it back without any issue. Unfortunately, not all of the payday loan providers effectively check up on their clients; hence, a couple of their clients end up accumulating massive debt, which results in stress and sometimes, personal issues.
On the other hand, if someone ever took out a payday loan, then they too are entitled to compensation. So, is a borrower able to claim? Firstly, a borrower can claim when the charges that the lender told them about weren’t clear enough. Next, a borrower can claim if they had to take out more loans from their lender in order to cover their initial loan. They can also claim if they had to borrow money from another lender in order to cover the payments from their initial loan. The borrower can also claim if their loan was an important part of their income and impacted their mortgage, groceries, bills, etc. A borrower can also claim when it’s clear that their payday lender did not thoroughly check the financial position of the borrower. Lastly, a borrower can claim if their payday lender provided them an unaffordable loan.
Are Payday Loans Legal in Canada?
When it comes to Canada, payday loans are legalized under the section 347.1 of Canada’s Criminal Code, as long as the province where the borrower resides has enacted provincial legislation when it comes to provisioning of the payday loans.
It was on November 1st, 2009 when the Payday Loans regulation became in force within British Columbia. For starters, the borrower is able to cancel the loan towards the end of the day they signed the agreement, and they don’t have to pay any charge. Also, a borrower can get only one loan at a time. Plus, the ability of the lender to access the bank of the borrower or contact the employer is restricted. Moreover, lenders aren’t allowed to lend more than 50% of the take-home pay of the borrower or can ask for repayment before the next payday of the borrower. It is important that all of the lenders must register and they are regulated under the Consumer Protection BC.
Payday Loans BC FAQs
What are the minimum requirements to be eligible for a payday loan in British Columbia?
- The borrower needs to be 19 years old at least.
- The borrower needs to be a Canadian citizen and must be residing in British Columbia.
- The borrower should be getting the income from the same source for the past three months.
- The borrower should have a net income that’s at least $800 per month and it’s deposited in their bank account.
- The borrower should have a bank account that’s Canadian and was open for at least three months. Plus, they should have access to online banking.
- The borrower should have a valid address, email address, and mobile phone number.
Why was my request for a payday loan declined?
Due to certain reasons, an applicant’s request for a payday loan gets denied. Before granting a payday loan, the system checks the data that’s been provided in the loan application of the applicant. This includes their income, credit history (not the credit score), payments of bills, repayments to other loan companies, and so on. A payday loan application gets declined when something is wrong with one or more than one of these provided information. Usually, payday loans are granted to people who are able to repay it back.
Why am I unable to reapply again when I have already paid off my previous loan?
If a person’s loan was repaid on the exact date of repayment as their previous loan agreement and they are unable to reapply, this usually means that the loan company has not yet received the confirmation of the final payment of that person from their bank. Once the last loan payment is debited from the bank account, it can take about four to five business days for the confirmation to arrive from the bank of the payment transaction. However, if a person wants to reapply before that, certain loan companies will accept the proof of a client’s payment. The client can send that proof through email and they should send it at least a day after they have paid their final loan payment. The client needs to follow certain criteria in order to send their proof of payment to the loan company or else they have to wait for the mentioned four to five business days in order to reapply.
What are the warning signs I should be looking out for when it comes to lenders in British Columbia?
Not everyone has your best interests at heart. There are lenders that use their conniving methods in order to scam desperate people. That is why it is important that you choose the right lender that has a legal business in British Columbia when looking for payday loans. Listed below are a couple of important warning signs you need to look out for in order to identify a lender that’s fake and predatory so that you don’t get involved with the wrong type of people.
- If your sales representative is not giving you all of the required information, then it is time for you to leave. Even though you don’t need to provide a lot of information in order to be approved, this does not mean that the lender just takes your banking information and does not discuss the proper terms and conditions of your loan. A sales representative that sweet talks you and does not answer important questions isn’t the one you should be involving yourself with, especially when it comes to money.
- You need to watch out for a lender that uses extreme and forceful sales tactics. Payday lenders have to manage a business; however, this does not mean that they get to behave in a rude and improper manner. A lender that is being aggressive and pushy during the payment process or the application process is showing signs of intimidation. They are doing that to take advantage of the client through this destructive tactic.
- Lenders that have extremely high interest rates or other hidden fees are the ones you need to watch out for. Before you end up giving them your personal and bank information, do thorough research in order to find out all of the charges of that lender. This includes knowing how much the loan will cost you by the time your payment term comes to an end.
- In certain situations, where a borrower can’t pay back the loan within the given time, the lender will then try to offer them an extension on their payment. This means that they will give them more time in order to pay them back. However, offers like these come with their own additional charges that will cost the borrower extra money. Due to the borrower’s desperate and vulnerable state, an offer like this might sound tempting but this will only lead to more debt. Not to mention, offers like these are illegal in not only British Columbia, but the rest of Canada as well.