Online Payday Loans In Canada

If you’re in a financial pinch, you may consider taking out a payday loan. They’re easy to qualify for, and are easily accessible, including online. However, as convenient as online payday loans may be, they come with some risks that you should be familiar with before you apply.

Key Points

• You can apply and get funded 100% online with multiple payday loan lenders in Canada.
• With some online payday loan lenders, you can apply anytime, even on weekends.
• Many online payday loan lenders don’t require any documents because they use instant bank verification (IBV) to verify your income and identity.

What Is An Online Payday Loan?

Online payday loans are short-term, high-cost loans that you can apply for and receive online. They’re designed to help cover last-minute expenses or emergencies until your next payday.

In recent years, the Government of Canada has cracked down on payday lending, which means that now most provinces have limits to how much a lender can charge for a short-term loan. Generally speaking, loan limits are $1,500, though many provinces do not permit loan amounts of any more than 50% of the borrower’s monthly income.

What Are The Features Of An Online Payday Loan?

Online payday loans are typically characterized by the following:

• Quick Application. You’ll fill out an application form on the lender’s website.
• No Credit Check. Online payday loans typically don’t conduct a credit check, which makes them easily accessible even for those with bad credit.
• Fast Approval. Payday lenders typically provide quick approval, sometimes within minutes.
• Fast Funding. Funds are typically deposited into your bank account the same day.
• Very High Interest Rates. Online payday loans are notorious for sky-high rates and fees, around $14 to $17 for every $100 borrowed, depending on where you’re located.
• Short Repayment Period. Your online payday loan must be repaid in full on your next payday, which can be in as little as two weeks.

How To Apply For An Online Payday Loan?

Applying for an online payday loan is a straightforward process. Here are the general steps:

Step 1: Apply Online 

With an online payday loan lender, you’ll be able to complete the entire application online. Simply visit their website and start the application. You’ll usually need to fill out the lender’s online application form with your personal details, such as your name, contact information, address, income, and employment information.

Step 2: Provide Documents

You may be required to upload documents to verify your identity and income. In some cases, you won’t have to provide any documentation. Instead, the lender will instant bank verification (IBV) to verify your income and identity. 

This process quickly verifies your identity and provides your lender with a temporary copy of your bank statement, which they use to verify your income. Lenders often use this tactic to minimize fraud and ensure the accuracy of all information involved.

Step 3: Get Approved

Many online payday loan lenders have a partially automated underwriting system. So you may get an instant decision in some cases. Other, you may have to wait up to 24 hours, though typically you’ll get a response within minutes after you apply.

Step 4: Get Funded 

If you’re approved, you’ll receive the funds, typically within 24 hours, but often much sooner. The funds can be provided to you in a couple of ways:

• Via e-Transfer – After approval, you may get your funds within minutes via e-transfer.
• Direct Deposit – Direct deposit usually takes a bit more time, but you can expect to receive it shortly after approval.

Where Can You Get An Online Payday Loan? 

	Amount	Interest Rate	Term	Province Availability
Loans Canada	Up to $50,000	Prime to 46.96%	4 - 60 months	Across Canada	Learn More
iCash	Up to $1,500	Varies by province*	Max 62 days	BC, AB, MB, ON, NB, NS, PEI	Learn More
Bree	up to $350	0%	up to 65 days	Across Canada	Learn More
Captain Cash	$500 - $750	Varies by province*	90 - 120 days	BC, AB, ON, NB, NS, PEI, NL	Learn More
Cash Money	Up to $1,500	Varies by province*	Up to 62 days	BC, AB, ON	Learn More
Cash4You	Up to $1,500	Varies by province*	Next payday	BC, ON	Learn More
MoneyMart	$120 -  $1,500	Varies by province*	Max 62 days	BC, AB, SK, MB, ON, NS	Learn More
Pay2Day	$50 - $1,500	Varies by province*	Up to 31 days	BC, ON, NS	Learn More
Instant Payday Canada	Up to $1,500	Varies by province*	Up to 60 days	BC, AB, ON, NS	Learn More

What Are The Requirements For Online Payday Loans?

The rate of approval for payday loans or payroll loans is very high. This is, of course, one of the reasons why they are so appealing. To be eligible for an online payday loan, you generally need to meet the following criteria:

• Steady Income: You must show that you earn enough to cover your loan repayment, which you can prove with documents like bank statements or pay stubs.
• Employment Status: Your lender may want to see proof of steady employment for at least 3 months.
• Active Bank Account: You need an active bank account for the funds to be deposited into and from which your repayment will be withdrawn.
• Valid Identification: You must prove your identity, which is typically done by showing a government-issued photo ID, like a passport or driver’s license.
• Age Requirement: You must be at least the minimum age of majority in your province.

These requirements may vary slightly based on the lender and the province you live in. 

How Do Online Payday Loans Differ From Traditional Payday Loans?

The main differences between online and traditional payday loans have to do with access and convenience. They both come with high costs and short repayment terms, but the convenience of online payday loans might make them more attractive to borrowers.

How Much Do Online Payday Loans Cost?

The cost of a payday loan varies depending on the province you live in:

How Do I Know If My Online Payday Loan Lender Is Legit? 

Unfortunately, there are predator lenders that lurk within the payday lending sphere. To protect yourself against these lenders, it’s important to do your research to ensure the lender you’re working with is legitimate. Here are some things to consider:

• Licensing: Make sure the lender is licensed to operate in your province. You can typically find this information on your provincial consumer protection website, or by checking the lender’s website or storefront.
• Secure Website: Ideally, the online payday lender’s website should have “https” in its URL and a privacy policy.
• Online Reviews: Check out reviews online from previous customers to see what they have to say about the lender.
• Physical Address: While online lenders may only provide loans via the internet, they should still have some sort of physical address for headquarters. Be wary of lenders that don’t have a physical address or only provide an email address and no phone number.
• Upfront Terms: Legitimate lenders should be transparent about their fees, interest rates, and repayment terms.
• Upfront Fees: Legitimate lenders don’t require upfront fees to be paid before you get your loan. Avoid lenders who ask for this.

What Is The Payday Loan Cycle?

The payday loan cycle is a serious debt situation that you may be at risk of finding yourself in when you take out a payday loan without the financial strength to repay your loan in such a short term. It can take months, if not years, to regain control of your finances and pay down the debt that has accumulated from your payday loans.

The payday loan cycle of debt often looks like this:

• Initial Loan: You take out a payday loan to cover an urgent expense.
• Inability To Repay: You may struggle to repay the loan in full on your next payday, considering the high cost and very short repayment term.
• Additional Loan Taken Out: In most provinces in Canada, rollover loans are not allowed. That means your lender is not permitted to give you another payday loan until your first loan is repaid. However, you could turn to another lender for a loan to get access to the funds needed to repay your first loan. Now, you’re carrying two loans.
• Cycle Continues: If you don’t pay off the loans you’ve taken out, you could find yourself in a situation of always looking for more financial help to make good on the loans you’re carrying. This leads to mounting debt and high interest costs, making it increasingly difficult to climb out of your mountain of debt.

Alternatives To Online Payday Loans

While a payday loan may perhaps be the easiest loan to get approved for and can provide funding very quickly, they might not be a good idea. This is especially true if you’re unable to comfortably afford the loan.

The good news is that there are other ways to borrow money with less risk compared to a payday loan.

Personal Installment Loans

These types of loans are typically more affordable alternatives to payday loans. You can apply for a personal loan from a variety of lenders, from banks to private lenders. Depending on the lender you choose and the size of the loan you’re interested in, your interest rate and payments will vary.

What makes a personal installment loan so much more affordable than a payday loan is the way in which you repay it. Installment payments mean you’ll have a longer period of time to pay off your loan, which can make these loans more affordable and manageable.

Credit Cards

Credit cards are a great financial tool if used properly and responsibly. They can facilitate large purchases and can be used as a short-term form of borrowing. This is why they are a good alternative to payday loans. 

When it comes to using a credit card to purchase something you cannot afford to pay for with cash, it’s important that you proceed with caution, as it’s very easy to overspend and rack up a significant amount of debt.

Credit Card Cash Advance

If your credit card issuer allows you to, you may be able to advance funds against your credit card limit and access the cash from an ATM. Though they have high interest rates, credit card cash advances are typically cheaper than payday loans.

Small Credit Lines And Cash Advances

Some financial firms offer small lines of credit and cash advances that require no credit check. You can use these to not only access quick cash, but also to build good credit:

• Nyble: With Nyble, you can access a zero-interest credit line of up to $250 to help cover small expenses. Within a few minutes, you’ll have access to these funds, without the need to undergo a credit check.
• Bree: Bree is a financial service that offers small, interest-free cash advances to help you cover urgent bills or avoid overdraft fees if your bank account is short. You can access up to $350, with no mandatory fees and no credit checks.

Home Equity Loan Or HELOC

If you own a house, then using your equity to secure a loan or line of credit is another affordable alternative to payday loans. Home equity loans or home equity lines of credit (HELOCs) involve using the equity you’ve built up as collateral. Because a home equity loan or line of credit is secured by your house, typically you’ll be able to get approved for a larger loan.

It’s important to note that if you need access to your loan as soon as possible, this is probably not your best option as you’ll need to undergo the approval process of the bank you have your mortgage with.

Beware Of Predatory Lending Practices

Reputable lenders perform some form of assessment before they approve or reject an applicant. Unfortunately, many payday lenders do not perform any type of assessment and therefore often lend to those who cannot realistically afford a loan.

If you believe that you are being taken advantage of by a payday lender, it’s important that you get in contact with the appropriate authorities immediately. Find out how to contact your provincial or territorial Consumer Affairs Office.

Additional Reading

Can I Have Multiple Payday Loans At The Same Time?

How Payday Lenders Prey Upon the Poor

How Can a Credit Counselling Agency Help Me?

Final Thoughts

While online payday loans can be super convenient, they’re not without their risks. Make sure you’re able to repay the loan by the due date, and only apply for a payday loan if it’s absolutely necessary.

Payday Loan FAQs