It is important to understand the difference between a payday loan, also known as a short-term loan, and a traditional loan before you decide to apply for it.
Traditional loans issued by banks are generally for fairly large amounts and are often used for a mortgage, automobile or personal loan. The bank takes advantage of your interest payments over a long period of time. Because the bank takes a risk by lending such a sum of money, it generally wants the borrower to have a good return. It can be difficult to get this type of loan if your credit history is too long, bad or non-existent. Traditional bank loans also take longer to approve and disburse funds because of the underwriting process.
Payday loan Conditions in Canada
The biggest difference between a payday loan in Canada and a traditional loan is the small amount, the rate and the duration. A payday loan is a smaller amount and for a shorter period, usually a month or less (payable on your next pay date). Payday loans in Canada are designed to be a practical resource for getting money in a pinch. The rate is higher than a traditional loan to represent the higher loan risk of fast cash lending, often without checking the credit scores. This is similar to how the insurance industry increases rates due to a ticket or an accident-they take extra risks, so they can charge more
In Canada, the amount that the lender can charge is determined from one province to another. This means that if you get a payday loan in Manitoba, for example, you will have different conditions and a different interest rate than a payday lender in Alberta. Regardless of the province, you have to pay the entire loan at maturity.
When should you apply for a payday loan?
The unexpected arrives; Good and bad. Everyone needs extra money at a given time for surprise medical bills, car or home repairs or unexpected life events.
The surprises of life never follow a calendar. If you just pay all your bills and your bank account starts to run out, and you suddenly need money urgently, you might want to consider applying for a payday loan. Most loan companies can provide the funds to which you are entitled the next day. In fact, payday-king.com can get the money you need within 30 minutes after approval.
If your personal loan options are limited, a payday loan can provide a lot of relief from the necessary stress. Once you make the decision to apply for a payday loan, keep in mind that you will need to repay it with your next paycheck.
Our advice on the application of a payday loan in Canada
Know how you will repay the loan
Borrow exactly what you need
Read the small print
Understand the consequences of not paying back the loan on time
Use this loan once you have considered alternatives
We are here to help you when you need us, and we want you to make an informed decision as to whether payday loans are right for you.