$40,000 is what an average Canadian household paid in taxes in 2018. This is more than the total cost of rent, food, and clothing used per household over the same period. The high cost of living has led many Canadians to seek alternative sources of cash to supplement their paltry income.
It’s likely that you’ve found yourself stuck financially at some point. The situation can be frustrating when emergencies or urgent financial needs emerge. You probably have considered the option of payday loans or cash advance loans during such times.
However, there are certain things you should know before getting payday or cash advance loans. Read on to learn the essential facts you should know.
What Are Cash Advance Loans?
A cash advance loan or a payday loan is a form of short term credit you receive at a fee. Most people opt for these loans because of the assumed flexibility they present. Lenders will expect the repayment of the advance within a week or two.
The reason they are referred to as payday loans is that most borrowers are salaried. These borrowers then make a promise to pay as soon as they receive their salaries. But over the years, online lenders have made it easy even for the unsalaried Canadians to apply for such services.
Before you consider taking a cash advance loan, there are things you may need to know. The following are some of the critical issues to consider.
1. The Loan Processing Time
Borrowing can be tedious and time-consuming. This is especially so if you have to undergo the pre-approval processes that can take weeks or even months. You will, therefore, marvel at how fast the approval process is when applying for cash advance loans.
If you seek the services of a reputable lender, the approval time can be less than a day. Most of the payday loans applied for are approved within the first 24 hours after application. You may need to apply for these loans during working hours to ensure active service.
2. Accessibility to Cash Advance Loans
Banking halls can be exasperating. You have to deal with the long queues and the processes involved before accessing a loan. You will, however, appreciate the ease when applying for a payday loan.
If you engage the services of a reliable lender, accessing a payday loan is simply a click away. The paperless online process allows you to key in the necessary information through your phone or computer. The cash transfer process in case of approval is also paperless and safe.
3. Repayment Schedules
One of the most frequently asked questions is, are payday loans bad? Well, it depends on the lender. Most unscrupulous lenders offer pay loans at exorbitant rates based on a rather short repayment window.
The idea is to push the borrower to default and accrue more charges. You need to read the terms and conditions of the loan engagement before agreeing to the credit. If you are lucky, you may also transact with an honest lender who can offer flexible repayment schedules.
A reliable payday loan lender will allow 3, 6, or up to 12 month repayment schedules.
4. Loan Interests
The devil is always in the details. Do not be in a hurry to apply for a cash advance loan before you scrutinize the details. You may need to understand how the interest rates will affect the principal amount borrowed. The finance charge for most payday loans is 15-20%.
If you fail to consider this factor, you may end up falling prey to greedy lenders. You need to review the terms to ensure that the loan interest makes financial sense to you as a borrower. Allowing the urgent financial need to obstruct your approach to reason may have negative consequences.
5. Consider the Fee Chargeable on the Loan
Cash advance loans attract an upfront fee before processing. You will likely incur a charge of 5% for every $10. The cost is a separate charge from the interest accrued on the principal borrowed.
The fee is chargeable at a flat rate, or a percentage of the loan advanced to you. You need to consider these details because they’ll guide your decision pertaining to the payday loan.
6. Credit Checks
The number one factor that limits access to loans is your creditworthiness. You may have a negative credit score due to past financial decisions that may have been imprudent. The good news is that most credit institutions do not necessarily consider such credit checks.
Most Canadians wonder, what do I need to get a payday loan? Many lenders are willing to give a cash advance loan without the usual credit checks. You do not need to have a current account in such cases.
Your credit score is also not a concern when applying for a payday loan.
Are Payday Loans Bad?
You may be doubtful about the decision to take up a pay loan. Regardless of what you may have heard about payday loans, they are one of the most flexible options available to you.
Imagine the relief when you can access a quick loan during an emergency.
The notion that this option is exploitative is due to the existence of exorbitant lenders. However, partnering with an honest, considerate, and transparent lender gives you the confidence to borrow when the need arises as you build a strong credit history.
It is incumbent on you to conduct due diligence before settling on a lender. This eliminates any unanticipated complications in the course of transacting. Otherwise, this is among the best financial options available to you.
Don’t let your doubts limit your access to cash advance loans.
Find a Reliable Lender
Financial decisions are complex. You need to understand the possible consequences before committing to repay a loan. However, with the right information, making such decisions can rescue you from instances of short-term financial crisis.
All you need is a reliable lender with considerate interest rates and flexible repayment schedules. Once you establish such factors, you can borrow and repay your cash advance loans as often as needs arise.
If you are stuck financially and need a quick fix, contact us for the best deals.
