If you need a little extra cash but don’t want to take out a long-term loan, a 3-month loan might be just what you need. While there may be multiple ways to get a 3-month loan, your choices shrink if you have bad credit. As such, getting a loan from a payday lender may seem appealing, but can you get a 3-month payday loan in Canada?
Let’s go deeper into short-term and payday loans to help answer that question.
Payday loans are short-term loans that are available to Canadians with bad or good credit who need cash quickly to cover an expense. But while 3-month loans may be considered short-term, they are not available as payday loans in Canada, as they typically only come in loan terms of 2 weeks (14 days) to 2 months (60 days).
If you’re looking for a loan that allows you to have up to 3 months to repay the loan amount, you’ll need to seek an alternative to payday loans, which we’ll get into next.
| Loan Amount | Interest Rate | Term | Province Availability | ||
 | Up to $1,500 | Varies by province* | Max 62 days | BC, AB, MB, ON, NB, NS, PEI | Learn More |
 | $120 - $1,500 | Varies by province* | Max 62 days | BC, AB, SK, MB, ON, NS | Learn More |
 | $500 - $750 | Varies by province* | 90 - 120 days | BC, AB, ON, PEI | Learn More |
 | Up to $1,500 | Varies by province* | Max 62 days | BC, AB, SK, MB, ON, NB, NS, PEI | Learn More |
 | Up to $1,500 | Varies by province* | Up to 62 days | BC, AB, ON | Learn More |
The following are some alternatives to 3-month payday loans if you’re looking for short-term financing:
Depending on how much money you need and what your credit limit is, you could put the expense on your credit card. If you can come up with the money you borrowed on credit before the next billing period, you can access the money interest-free. Or else you can simply pay the minimum payment until you can pay off the amount.
However, if you carry that balance over to the next month, you’ll be stuck paying interest on it, which generally ranges from 19.99% to 22.99%. So keep that in mind before borrowing with your credit card.
That said, you could get around this issue by applying for a new credit card that offers a low or 0% interest introductory period, which is usually from 3 to 6 months. During that time, you can use your credit card and carry a balance for this promotional period without having to pay interest. But you’ll need to make sure you can come up with the money before this period is up, as the regular interest rate will kick in and will be applied to your outstanding balance.
While most installment loans have a term of 6 months to 5 years, 3-month installment loans may be available with certain lenders. However, they’ll often charge higher interest rates than a regular installment loan.
Unlike payday loans that require the funds to be paid back in one lump sum, personal installment loans allow you to repay the loan amount in installments over the term. In the case of a 3-month loan, you’d make regular payments over the course of 3 months, after which the full loan amount must be repaid, plus interest.
Instead of taking out a traditional loan, you might want to apply for a personal line of credit. These financing programs work somewhat like a credit card, in which you’ll be provided with a specific credit limit to spend up to.
As long as you make timely payments, you can keep your line of credit account open. That way, you can continue tapping into this credit account as the need for cash arises without having to repeatedly apply for a personal loan. Moreover, interest is only charged on the amount you withdraw, rather than the entire credit limit.
Let’s compare how much a 3-month loan for $1,500 could cost you based on different financing types. To make things more comparable, we’ll assume that we’re making the same payments on a personal line of credit and credit card as an installment loan:
| Installment Loan | Personal Line of Credit | Credit Card | |
| Interest Rate | 46.96% | 29.99% | 19.99% |
| Monthly Payment | $539.63 | $525.2 | $516 |
| Total Cost | $1,618.9 | $1,575.59 | $1,548 |
Conventional lenders, like banks and credit unions, typically require borrowers to have good credit for personal loans. If your credit scores need improvement, you may find it very difficult to get approved for a 3-month loan with these lenders.
Instead, you may have better luck with an online lender. These alternative lenders place more weight on other factors, such as income, assets, and job stability.
Yes, some lenders do not conduct a credit check at all, which means you can apply for a bad credit 3-month loan no matter what your credit score is.
Keep in mind, however, that the interest rate associated with bad credit loans will be much higher than traditional loans, which makes them a lot more expensive.
When applying for a 3-month loan, you will usually need to provide bank statements as part of the application process. However, if you don’t have a bank account and are unable to provide these bank statements, you’ll likely be unable to qualify for the loan. In such cases, a no bank verification loan can come in handy. A no bank verification loan allows you to qualify for a loan with no documentation from your bank.
Before applying for a 3-month loan, there are a few important factors to consider:
The interest rate you’re charged will have a direct impact on the overall cost of your loan. The higher the rate, the more you’ll pay over the loan term.
Rates for personal loans generally range from 4.5% to 47%. For this reason, you should aim to get the lowest rate possible, which is why it’s helpful to have a good credit score when applying for a loan.
Further, lenders charge fees on loans, such as administrative and origination fees, so you’ll want to know what these fees are before you apply.
Loans come in a variety of term lengths and payment schedules. Your goal is to work out an arrangement with your lender whereby the loan term and payment schedule matches your needs. As such, some flexibility is an important consideration when comparing loans and lenders.
If you’re in need of quick cash, the underwriting process is important to know. Find out how long it will take to get approved for the loan, and when you can expect to have the funds deposited into your account. Generally speaking, traditional lenders usually take at least a week or longer to process loans, while online loans can be approved and funded within 24 hours.
A 3-month loan could be just what you need if you require an extra lump sum of cash but don’t want to finance for a long period of time. However, 3-month loans are not available as payday loans here in Canada. As such, you’ll need to apply for a short-term personal loan or a line of credit with your bank, credit union, or online lender.
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Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.
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