Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
The payday loan business is a very lucrative business. Companies that are involved in this market benefit from the excessive interest rates and fees that they charge for their products.
And while it can be argued that in many ways, payday loans are a great option for certain consumers. If you need a loan, and fast, payday loan companies do a great job in getting you cash. The APR they charge is exorbitant.
The cost to consumers is excessive, maybe even abusive, but that’s not the only issue at hand. Oftentimes, Canadian consumers who are credit constrained or dealing with financial missteps are uncertain of the alternative options available to them. Whether you need help covering the cost of a vehicle repair or are trying to make ends meet, there are payday loan alternatives out there that can help.
Rather than put yourself at risk with a payday loan, you may want to consider other options when extra funds are required.
Installment and personal loans tend to have quicker approval times, lower interest rates, and longer repayment terms when compared to payday loans. To repay an installment or personal loan, you’ll be required to make a scheduled payment, usually monthly or weekly. The repayment schedule is much less stressful compared to payday loans where the entire amount plus interest becomes due in a short period of time, typically two weeks.
You might be wondering, what about credit score requirements? Installment loan lenders will likely consider your credit score, but they will be more concerned with your ability to repay the loan. If you have a steady income and a history of timely payments, you shouldn’t have anything to worry about. This is especially true if you choose to work with an alternative lender.
If your emergency expense can be covered by a credit card, that is an excellent solution. If you can’t use credit, cash advances from your credit card are another option. While there is a hefty fee for using a cash advance, it’s a small price to pay for the convenience of cash. Furthermore, you’d be paying exorbitant interest on a payday loan anyway, a cash advance fee is can be more affordable.
Just remember that interest starts to accrue on withdrawn cash from credit cards the day you make the withdrawal. Even though you have a longer amount of time to repay the debt, don’t wait too long because interest can build up quickly.
If you have an issue obtaining an unsecured loan and have an asset that can be used as collateral, you can consider getting a secured loan. Each lender has varying collateral requirements. Reach out to lenders to determine if your collateral is acceptable.
Credit unions are known for offering affordable interest rates on their loans. These institutions tend to consider additional approval factors on top of credit scores as well. It’s definitely worth a shot to get a loan from a credit union as they are one of the best lenders on the market.
Pride can be difficult to overcome, but remember that we all need help from time to time. Most friends and family will be more than happy to help you with your short term financial problems. The benefit of borrowing from friends and family is there won’t be any interest. However, don’t take advantage of your loved ones, do your best to repay them quickly.
If you have an emergency fund, situations like these are precisely what the fund is for. Hopefully, the fund covers the entire cost if not, you can use your fund in conjunction with another financial tool. If you don’t have an emergency fund, learn from this experience and build one for future financial emergencies.
Many employers are completely understanding of emergencies and are willing to help you out with an advance. Your boss is human too and will likely understand exactly what you are going through. It can be awkward to ask your employer but do your best to ask calmly and respectfully. Despite your nerves, it’s definitely worth your while considering the money will be interest-free. The worst thing that can happen is your boss says no.
Alternatively, you can ask your boss for extra hours to make more money. This money can be put toward your financial emergency. You can find a temporary or permanent side job for extra cash. Of course, if your financial issue is time-sensitive, this might not be an option.
While coming up with the money needed to handle your financial crisis, you should communicate with creditors. Ultimately, creditors want to get paid. When you communicate with creditors regarding when they can expect a payment, they will be less likely to escalate the situation. You want to avoid escalation if possible as that would put you in a worse financial position.
Creditors are people too. They will likely understand your temporary situation and work with you to extend your due date or create a repayment plan. Again, lenders want to get paid at the end of the day, even if it means the terms need to be adjusted.
A credit counsellor can help you adopt healthy financial habits. Credit counselling can help you budget, create a debt repayment plan, control spending among many other things. A credit counsellor can also help you get through short term financial hiccups such as a financial emergency.
Before we look at some alternatives to payday loans, let’s understand why payday loans can be dangerous.
One of the key features of a payday loan is its high-interest rates. Depending on the province you live in, it can cost between $15 – $25 per $100 you borrow. That’s equivalent to 391.0% – 651.8% APR. However, in Quebec, payday lenders can only charge an annual rate of 35%. This rate makes it unprofitable for payday lenders to operate in Quebec, so it can be difficult to find one.
Thankfully there are alternatives to payday loans. Instead of looking for a low interest payday loan, you can try using an alternative form of financing. Let’s explore your alternatives further below.
How to know when credit counselling is right for you? Find out here.
If you’re looking to take out a payday loan because you the majority of your monthly income goes toward debt payments, you may want to consider seeking more drastic or specialized debt relief help. A credit counsellor can help you find the right fit. Whether it’s debt consolidation or even a consumer proposal or bankruptcy.
If you’ve explored all of your other options and none of them will work, considering a payday loan should be your option of last resort.
Before proceeding with a payday loan, ensure that you understand the terms and conditions completely. Interest, due dates and other fees are very important to analyze when it comes to payday loans. If you aren’t crystal clear on the loan’s structure, you may run into worse financial trouble or cycle into debt.
Financial trouble happens to the best of us. Do what you can to handle the situation effectively without turning to payday loans. If you need to use a payday loan, be sure to pay it on time and in full to avoid worse repercussions. But, if you’re looking for an affordable and effective alternative to a payday loan, we can help. Whether you want to be contacted to an installment loan provider or are looking for more information about debt-relief options, Loans Canada has the options you need.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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