Last March of this year, Canada and the rest of the world was declared under lockdown due to the surge of the COVID-19 global pandemic. Since then, life-changing events have happened. Policies and guidelines have been established that prohibit local and international travels, impose social distancing and the use of masks, etc. The world is like put on a stop for several months.
Even though things are starting to get back to normal, we cannot ignore the major impact that this pandemic has caused every country’s economy. In May, Canada led to a recession which increased its unemployment rate to 13.5%. Difficult financial situations have become inevitable to a lot of its citizens which pushed them to turn to money lenders. This article aims to guide every Canadian who is thinking about applying for a loan, specifically payday loan. It might help you convince your answer for Canada payday loans.
Online Payday Loans Canada
First, we have to answer the question:” what is a payday loan?”. A payday loan is a type of short-term loan that allows a person to borrow a small sum amount of money. The borrower is then obliged to pay it back on or before he or she receives their next salary. Unfortunately, you have to have a steady source of income for you to be qualified for this loan. A payday loan in Canada can vary between $100 up to $1500.
A payday loan is one of those “no credit check” loans, which means a lender won’t necessarily look into your credit score to approve your application. When applying for traditional loans, a good crest score or rating is very crucial. In Canada, you must have a score of at least 660 to guarantee that your request will be considered by the lender or lending company.
Online payday loans have become more convenient as ever since the start of the pandemic. Applying for this couldn’t be easier as you can do it in the comforts of your own home — you wouldn’t need to come outside and risk being infected by the virus. It will only take you a few steps and decisions can come in in just a day.
Pros and Cons of Online Payday Loans (200)
Although online payday loans may look good and simple, they also have their potential disadvantages that you have to look out for. It is always important to weigh your pros and cons before finalizing everything to make sure that nothing goes wrong.
Pros
- You can apply even with a bad credit score.
A lot of young professionals nowadays haven’t built up their credit score yet, especially now that the pandemic has occurred. The best thing about no credit check loans like payday loans is that lenders won’t look into your rating, which is good for those who have bad credit scores.
- The application only takes a few steps.
Lending companies have online application forms on their websites. What you only have to do is fill it out correctly and then hit submit. Some may have a couple of other requirements but those only take a few minutes.
- Decisions can only take a few minutes.
Some online lending companies send out borrowers’ application forms to multiple lenders which makes the possibility of getting approved really high. You can guarantee that you can hear from your lender on the same day you applied.
- You do not have to come outside.
This is what makes an online payday loan application very convenient during this pandemic. Now that Canada still has strict guidelines on social distancing and wearing of masks, applying online can be the best and least hassle option for you. All you need to do is open your device and get into their website.
- Online lenders need fewer requirements.
Unlike traditional loans that need several bank statements, online loans only require a few documents that will prove your eligibility. Requirements may differ from one lender to another.
- The chances that you get accepted is very high.
As long as you are eligible and are proven capable to pay back the loan, lenders are most likely to approve of your application.
Cons
- You are prone to lender loan frauds.
Sadly, fraudulence is common in online loan applications. The last thing that you want is to lose more money during a financially challenging time of your life. Make sure that you are transacting with a credible and highly established lender.
- You cannot guarantee that the website is secure
Aside from frauds, you should also look out for identity thieves. Some online loan websites lack cybersecurity which allows these thieves and hackers to steal your identity and bank information.
- Online lenders charge higher interests and rates.
Online loan applications are more likely to charge high rates compared to in-person. Some lenders have also taken advantage during this pandemic and doubled up their interest rates.
- The amount that you can borrow is limited.
As mentioned earlier, you can only borrow up to $1500. So, if you need to loan more than this, online payday loans are not for you.
Qualifications
Requirements and qualifications may vary depending on what the lending company is demanding. Here are the usual qualifications that you must possess so you can apply for an online payday loan in Canada.
- You must be 18 years old and above.
- A long-term resident/citizen of Canada.
- A consistent source of income.
- Chequing account.
With this, you must be able to provide the following documents that show proof of the aforementioned qualifications:
- Valid identiication card.
- Citizenship certificate.
- Proof of income.
- Bank information.
Tips in Applying for Online Payday Loans in Canada This Pandemic
Conduct your own research
It is important to have enough knowledge before diving into an application in any type of loan. Make sure that you check all possible kinds of loans that you can apply to so you’ll have an idea on what suits best for your case. Research as well as different potential lenders and their interest rates and fees.
Contact multiple lenders
It is good that you have multiple options for potential lenders. This will help you compare and contrast each and every one of them and then settle with the best one. When you’ve narrowed your options, contact them and ask them questions about your concerns.
Choose a credible lender
Make sure that you’ll go with a highly established lender with an excellent track record. Conduct a background check to assure that they are legit lending companies.
Set your budget
With the information that you have gotten earlier about fees and rates, you should set the budget that you are willing to spend on loan costs. A budget will help you in avoiding overspending and settling on a loan that is out of your financial capabilities.
Ready your requirements
Prepare all documents beforehand and fill out any application forms correctly. This is to avoid wasting time during your application.
Make sure that you can pay back on time
Although payday loans are no credit check loans, failing to settle it or paying it back on time will be surely reflected on your credit score. You do not want your already bad credit score to get any lower. This is also to avoid increased interest rates and costs.
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