- Any credit accepted
- Rates from 6.99%
- Doesn't affect your credit
- Loans up to $50,000
- Re-establish your credit
- Apply once, get multiple options
As a resident of Lethbridge, chances are you can make a decent living, as wages in the province of Alberta some of the highest in the country. Then again, any major city can also be a highly expensive place to call home, so consumer debt and bad credit are all too common for some.
Unfortunately, if you have low financial strength, accessing favorable credit products in Lethbridge is tough, which can make the idea of payday loans quite tempting. Not so fast! While payday loans can be helpful in certain ways, they also involve a few drawbacks that you should know about.
Before you take out a payday loan, it’s important to know your rights.
Generally speaking, a payday loan is typically a small loan of $100 to $1,500. Although some lenders in Lethbridge offer a variety of payment methods, more often than not, the loan is deposited as a lump sum directly into your bank account within 24 – 48 hours of your application being approved.
At first glance, payday loans are quite appealing, not only because you’ll receive the funds relatively quick but also because they are very easy to be approved for. All you need is to be at least 19 years old (Alberta’s age of majority), have an active bank account and steady income, and proof that you’re a permanent resident.
However, though they may be appealing on the surface, as we mentioned, there are several drawbacks associated with payday loans that can make them totally wrong for your financial situation in Lethbridge. Always consider these potential benefits and drawbacks carefully before you apply.
For more information about the payday loan cycle, check out this infographic.
Although payday loans can be helpful when you can’t get approved elsewhere or you have a dire financial emergency, they can also be extremely hazardous to both your credit and financial health. In fact, strict rules have been established across Alberta that limits the amount of debt payday loans cause.
In Alberta, it is illegal for a payday lender to:
Unfortunately, there are many predatory lenders and scam artists out there, especially when it comes to payday loans (click here to learn how payday lenders are preying upon Canadians). They are looking to take advantage of the fact that you can’t get approved elsewhere or are desperate to resolve a financial emergency, which is why it’s important to do proper research before you apply.
If your supposed lender ever breaks any of these rules, doesn’t have good credentials, or customer reviews, a real address and a page with the Better Business Bureau, do not give them any of your information and report them to the appropriate authorities.
If you’re not sure whether a payday loan is the right product for you, there are also plenty of lenders in Lethbridge that can offer you a personal loan. Although similar in the sense that you would receive a lump sum of money through direct deposit, personal loans are often safer for your finances because you can pay them off in installments.
How much do payday loans really cost? Find out here.
While payday loans can only be found through specific lenders in Lethbridge, there are many different sources that offer personal loans in some capacity. In addition, personal loans usually come with lower rates and can be much larger if you’re qualified. Depending on where you apply, your repayment plan can even be adjusted to suit your financial needs and last for several months to several years, making them more manageable.
However, personal loans can be more difficult to get approved for, especially with prime lenders in Lethbridge like banks, where standards are usually more strict. More often than not, you would need a decent income, good credit score, and low debt load in order to qualify. Though there are also many alternative lenders in Lethbridge with easier standards, these institutions often charge higher rates than prime sources.
Another thing to consider would be the overall length of your debt. For instance, while payday loans are often more expensive, you would still be out of debt within 14 days, assuming you pay on time. On the other hand, a personal loan can put you in debt for quite some time, resulting in the same kind of debt cycle if you’re not careful.
Essentially, a personal loan is typically a better option if you’re qualified enough and have larger expenses that need to be financed over time, while a payday loan is better if you can’t get approved by a traditional lender or you have an emergency to cover.
Do you know what the true cost of borrowing is? Find out here.
As we mentioned, one of the biggest downsides to payday loans is that they can put you in a cycle of debt that is extremely hard to break under the wrong circumstances. Don’t worry, if you’re already involved in that kind of situation, there are plenty of debt relief products and programs available in Lethbridge, such as:
Once again, any of these products or programs, while beneficial in ways, can also have a drastic impact on your finances, both negatively and positively. Always do proper research and get advice from a professional before you attempt any debt relief option.
10 questions to ask before you get a payday loan, click here.
Since the risks involved with payday loans can be substantial, it may be better for you to find an alternative solution to deal with your daily expenses and financial emergencies. Although they can also affect your financial well being both positively and negatively, they can certainly be safer than the average payday loan.
Try these alternative solutions:
If you’ve been considering taking out a payday loan to cover the cost of an unplanned expense, Loans Canada can help by matching you with a more affordable alternative in Lethbridge.
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