What is a Payday Loan?

A payday loan is a short-term loan with high fees that makes it very expensive to borrow. You can borrow up to $ 1,500. You must repay the loan when you receive your next paycheck.

If you cannot pay off the loan on time, you will have to pay more fees and interest. This will increase your debt. Payday loans are there to help you if you run out of money before your next payday, or for a short time. Avoid using it to pay for costs like rent, groceries, or utility bills. If you use them this way, you could end up with financial problems.

Payday loans are offered in store and online by private companies.

What to expect when getting a payday loan

Here is what you can expect if you are thinking about getting a payday loan.

Information to provide to a payday lender

Typically, payday lenders ask you to prove that you have:

  • Current income
  • A bank account
  • A permanent address

Before giving you a payday loan, payday lenders require you to do one of the following: Fill out a form allowing the lender to withdraw the full loan amount, and fees, directly from your bank account when the loan is due to be repaid (called a pre-authorized debit)

Provide a post-dated check for the total loan amount plus fees

Be careful when giving your banking information to a payday lender, as he will have access to the funds in your account.

Getting money from a payday lender

In most cases, the payday lender will deposit the money in your bank account or give you cash. However, in some cases, the payday lender may ask you to receive the loan on a prepaid card. There may be additional fees to activate and use it. You can avail our services for instant payday loans online with guaranteed approval.

Paying off a payday loan

Some payday lenders will ask you to pay off your loan at the same place you received it. In many provinces, a payday lender cannot extend or renew your payday loan.

Make sure you understand the loan agreement

Payday lenders will ask you to sign an agreement. This agreement shows the costs of your loan, including interest, fees, and the due date. Read this agreement carefully before signing it. Ask the payday lender questions if there is anything you do not understand. Check with your provincial or territorial consumer protection office about the rules governing payday loans where you live.

Payday Loans Online

Payday lenders can conduct their business in a physical location or online. You have to be careful with online payday lenders. Many of them do not have a license. These lenders do not follow all of the provincial rules designed to protect borrowers. Only use the services of licensed online payday lenders. Contact your provincial or territorial consumer protection office to see if a payday lender is licensed. Beware of online payday lenders located outside of Canada. If you ever have any issues with these lenders, it might be difficult to resolve them. Also, watch out for online sites that claim to offer payday loans. Some of them only collect your information and give it to a real payday lender.

How much does a payday loan cost

Payday loans are very expensive compared to other ways of borrowing.

Here are the reasons:

  • You have to pay high fees
  • Costs can be an interest rate of 500-600%
  • You may have to pay fees if your check or pre-authorized debit doesn’t go through

These high costs can make your loan more difficult to repay, which can increase your financial problems and increase your stress. Before getting a payday loan, you need to be sure that you can pay it off on time. Otherwise, your financial situation could get worse. Your debt can keep piling up and you can end up paying a lot of money over time. You have the right to cash your Government of Canada check free of charge at any bank. You can cash your check even if you are not a customer of the bank. Your check must have a value of $ 1,500 or less. You must provide an ID with your photo and signature, such as a driver’s license.