Has an unexpected or sudden expense shown up? Are you low on funds and wondering how you’ll deal with the expense? Don’t panic! Payday loans are a great solution to sudden and urgent expenses.
What is a Payday Loan?
As the name implies, payday loans are a type of short-term loan of up to $1 500. Borrowers could cover a shortage in cash quickly and easily, with the expectation of paying off the loan as soon as they receive their next paycheck. If a payday lender doesn’t get their cash back on time, your cost of borrowing could increase since more fees and interest rates could be charged.
How Do I Apply for a Payday Loan?
The application process for a payday loan is quite simple. The good thing about payday loans is that many lending institutions are flexible when it comes to credit scores. Many privately-owned companies offer loans online, which are more convenient and faster to apply for than in-store. When you are ready to apply for the cash you need, you’ll need to supply lenders (whether it is online or not) with proof that you have a:
A regular income
It is very important to prove that you are capable of paying back the cost of borrowing. Furthermore, it could also verify that you are of legal age.
A bank account
A Canadian bank account that has been open for at least six months is mandatory. Applicants will have to submit banking history and, in some instances, recent bills.
A permanent address in Canada
You are also required to submit a government-authorized ID to prove your Canadian residency.
A steady Job
Applicants have to have a steady job for at least a couple of months (typically 3-6 months) to be qualified.
Receiving and Paying Back Your Payday Loan
Usually, payday lenders will deposit the money into your bank account or give you cash directly. At the same time, in some exceptional cases, prepaid cards could also be offered, extra activation fees will also be included in your cost of borrowing.
In terms of paying back your loans, most payday lenders utilize the automatic withdrawal option, where the money gets taken out from the borrower’s account automatically to recover the loss of the payday lender.
In some instances, lenders have to divide the total payback amount into smaller ones to get approved by the bank. However, additional fees might apply, and they are all in the borrower’s debt.
Benefits of A Payday Loan
There are a few differences when getting a payday loan and applying for a traditional bank loan. Here are some pros when applying for a payday loan.
You’ll Never (and should never) Pay anything in Advance
The best thing about a payday loan is that you do not have the burden of paying anything in advance. If the payday lender is legitimate, they will never ask you for an advance payment. All you need to submit before the loan is a form and provide a post-dated cheque for the total loan amount.
It is Available to Applicants with Bad Credit Scores
If you were ever refused a loan, couldn’t pay off your debt or declared bankruptcy, then you are probably one in more than a million Canadians who have bad credit. Having bad credit makes it harder to take out loans like a mortgage or auto loan. However, you do not have to worry about your bad credit when applying for payday loans through Better than the Bank. Here with us, your past financial mistakes won’t come back to haunt you. As long as you have proof that you can cover the total payback (initial money and cost of borrowing), Better than the Bank can get you the cash you need.
Same-day Cash
This can depend on the lender; however, the chances are that your loan will be approved on the same day you applied for it. Amounts could also vary since it is primarily according to how much money you earned in the past. Regardless, payday loans are the quickest way to borrow money safely and easily. While banks tend to take much longer to process requests for loans, same-day cash from institutions like Better than the Bank are a viable option for those who have run into unexpected costs, and need cash as soon as possible.
Special Attention Needed
There is no so-called perfect option in the world. Whatever you choose, you will always have to consider every single detail. Here are some suggestions for you to think about before getting a payday loan.
Payday Loans Should Only be Used in the Case of an Emergency
One feature that makes payday loans stand out is the fact that you have the option of paying them back when you receive your next paycheck. Therefore, when you are in urgent need of money—urgent car repairs, dental emergencies, health emergencies, and other emergencies that can break the bank—payday loans are a great way to quickly and easily help. Because of the expectation for you to pay the loan back as soon as possible, using these types of loans for everyday purchases like groceries, rent and entertainment is not recommended.
The Amount of Cash you Can borrow is limited
Like what we have discussed initially, you can only access a limited amount of cash, which usually ranges up to $1 500, which may not necessarily meet your needs.
Bottom Line
A payday loan is an easy gateway to access cash that could fix your urgent money-related problem. However, while the borrower is expected to pay a loan back as soon as they receive their next paycheck, many fail to do so. Many people find themselves stuck in financial trouble because of late payments. Here at Better than the Bank, we aim to deliver financial solutions to all of our customers. We believe everyone deserves a chance, and that is why we provide hard working citizens with different loan options. So If you need a loan, rest assured our team of expert money lenders will be able to assist you promptly.