The most common practice in a typical Canadian society is acquiring a debit card and then a credit card to pay for recurring bills, leisure activities, online subscriptions, retail shopping etc. If you prefer a more unconventional route of choosing not to use your credit card or take out a huge loan for a bill under $1,500, then a payday loan may be something that could benefit you immensely.
A payday loan is defined as a short-term loan with interest rates. In more common terms, a payday loan is defined as a cash advance or check advance. In Canada, you can borrow for as low as $500 and for as high as $1,500. The loan is designed to help you pay off any immediate expenses or help you pay bills on time to avoid high penalty fees.
In order to qualify at most payday loan companies, you must meet be the following criteria:
- Must be a Canadian citizen or be a permanent resident;
- Be 18 years and over;
- Must be working for the past 3 months with regular income;
- Your income must be at least $1,200 per month (sometimes more, sometimes less), and
- Have a bank account and your current work must pay you through direct deposit.
Meeting all of these requirements means you are set to receive your immediate cash advance through the company of your choice and begin utilizing that cash as you deem fit.
Who Can Benefit from Payday Loans?
A majority of people can benefit from a payday loan. But they are especially beneficial for those who need cash immediately in their checking account. By filing an application and meeting all necessary requirements with the company of your choice, the borrowed money could be ready for you to spend. These loans benefit those who have exhausted their own personal funds or savings and need assistance paying their personal expenses.
Furthermore, a payday loan is equally beneficial for those who choose not to use or maximize their credit card or do not own a credit card themselves. It is also for those who do not have any other means to borrow money elsewhere or they need the cash immediately for an emergency. For example, Robert is $500 short in order to pay for his car’s repairs in the shop. He may need to take out a payday loan of $500 to pay his local mechanic.
The Benefits of a Payday Loan
- It temporarily relieves you of your expenses;
- Most payday loans are renewable;
- The money arrives almost immediately into your checking account, and
- It’s quick and easy to apply for one.
Who Cannot Benefit from a Payday Loan?
Keep in mind that many are eligible for a loan but there are a few exceptions. You may need to contact the company you wish to loan from in order to determine whether or not you qualify as a borrower before going through the process of filing their application.
You may not benefit from a payday loan if you meet the following criteria:
- Are on welfare;
- Are on a Canadian Pension Plan;
- Currently have a student loan;
- Are self-employed or you are an entrepreneur;
- Pay child tax, and
- Are on disability benefits.
Paying Off a Payday Loan
A payday loan must be repaid in full and it cannot be done in increments. The company that lends you their cash expects repayment in full as agreed upon in contract. If you are unable to repay the loan, you can file for renewal of the loan to extend your deadline.
Remember that some companies require that you renew a few days in advance before the due date. However, in order to avoid this, you can set yourself a reminder and place some cash on the side so that you’ll be ready to pay back your lender. This way, you can avoid any of their penalty fees.
Payday loans are designed to benefit the general population who do not have the desire of going through their bank or to sell off their property just to pay for expenses under $1,500. Above all, a payday loan is made to help with temporary problems and provide short-term solutions. Make sure to consult with a financial expert and/or conduct your own research before taking up a loan of any kind.