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Can You Get A Payday Loan?
Yes, payday loans are available to residents of BC, and they’re very easy to get approved for compared to other loan types.
Payday loans are usually made for no more than $1,500, so they’re only good for small cash needs. They’re also very expensive compared to other types of loans.
Interest fees in BC may be as high as $15 per $100 borrowed. Additional fees may also be charged if you’re late on your repayment.
What Is A Payday Loan?
Payday loan terms are very short, with maximum terms of 62 days. Because there is such a short window of time to repay your loan, it can be tough to meet this tight deadline. As such, you should only take out a payday loan if you’re certain that you can come up with the funds needed to pay the loan back, plus interest, by the due date.
If you don’t pay back the loan on time, you can’t take out another payday loan to pay off your old loan. This is known as “rolling over” your loan and is not permitted in BC. You’re only allowed to take out one payday loan at a time.
Can I Get A Payday Loan Online In British Columbia?
There are several online payday lenders available in British Columbia. All you need to do is visit the lender’s website and apply online from wherever you are, at any time. All required documents can also be uploaded directly to the lender’s website.
The application process is quick and simple, and the funds can be deposited directly into your account or e-transferred in as little as a couple of hours after loan approval.
Are You Eligible For A Payday Loan In British Columbia?
To qualify for a payday loan in British Columbia, you must meet the following criteria:
Be at least 19 years of age
Be a Canadian citizen or permanent resident
Have a valid address
Have an active bank account that can accept direct deposits
Have steady employment
To verify your identity and financial status, you may be required to submit any one of the following documents:
Government-issued photo ID
Social Insurance Number (SIN)
Utility bill (for proof of address)
How To Calculate The Cost Of A Payday Loan In British Columbia?
When you take out a payday loan, you’ll need to pay interest on the borrowed funds, which is how lenders earn a profit. As mentioned, payday loans in BC can cost as much as $15 per $100 borrowed.
To illustrate how much a payday loan in BC may cost you, let’s assume you’re borrowing $1,000 at $15 per $100 borrowed. At this rate, the cost to pay back the loan would be as follows:
$150 ($15 per $100 borrowed)
$1,150 $1,000 (originally borrowed funds) + $150 (interest on the loan)
Other Costs To Consider
There may be other charges to cover in addition to the interest, including the following:
Late payment fees
Can I Get A Payday Loan Online In British Columbia Via e-Transfer?
Yes, you can receive your borrowed funds through an e-Transfer, depending on the lender. In fact, an e-Transfer is the most common way that payday loan funds are sent to borrowers in BC.
As long as you have an email address and bank account, you can access your funds this way. Then, you can access the money directly from your bank account.
Can I Get A Cash Payday Loan Online In British Columbia?
You can get access to the money from a payday loan in several ways in British Columbia, including via cash. The payday lender must have a physical location, and you must visit in person to receive your funds in cash. This is the fastest way to get funded.
Payday Loan Laws In British Columbia
Payday Loan Amount
You can borrow up to $1,500 with payday lenders, however, the amount cannot exceed 50% of your net pay.
Payday loans must be repaid within 62 days
$15 per $100 borrowed.
Cooling Off Period
All lenders must give you the right to cancel your payday loan contract within 2 business days of approval without penalty.
Roll Over Law
No lender is allowed to force a “roll over” of your loan, meaning they cannot provide you with another loan to finance your first if you haven’t paid it in full
All lenders in British Columbia and Canada, in general, must provide you with the exact details concerning your loan, payment process, interest fees, penalty charges, and any other related costs
All lenders in British Columbia and Canada, in general, must have a business license validated by their provincial government
Click here to learn more details about your rights when it comes to payday loans.
When Is A Payday Loan A Good Choice?
In truth, there are very few instances when a payday loan is actually a good idea. They should only be used under the following kinds of circumstances in British Columbia:
You have a serious financial emergency on your hands that your income or credit cards won’t cover
Your credit is so bad that you don’t qualify for any type of credit card, personal loan or other debt relief product
You’re 100% certain that by the time your next paycheck arrives, you’ll have enough money to reimburse your lender in full, fees and all
When Is A Payday Loan A Bad Choice?
Almost always! But even more so when you’re in these types of situations:
When your other regular expenses would use up most of or your whole paycheck
When you do qualify for other, less predatory credit products in British Columbia
When the cost you’re trying to cover is not a serious, necessary expense
When your income is typically unstable (freelance, commission based, part-time hours, low wage/salary, etc.)
For some differences between personal, private and payday loans, check this out.
What Warning Signs Should I Look Out For in British Columbia?
There are only a few payday loan lenders left in Canada that still qualify as legal businesses. While no payday loan is cheap, some lenders are definitely more predatory than others, especially if they are scam artists preying on desperate people. Here are some several warning signs you should look out for to identify a predatory or fake lender in British Columbia and Canada, in general:
The sales representative won’t give you all the required information. Just because you need very little to be approved, doesn’t mean the lender should simply take your banking information without discussing the terms and conditions of the loan properly. If it seems like your sales representative is sweet talking you and avoiding your questions or important information, walk away immediately.
The lender uses forceful sales tactics. Just because payday lenders are businesses, that doesn’t excuse improper, rude behaviour on their part. If the lender is clearly being pushy and aggressive during the application or payment process, it’s a sign that they’re trying to intimidate and take advantage of you.
They charge sky high-interest rates and other vague/hidden fees. While almost all payday lenders in British Columbia charge high-interest rates and fees, it’s important not to gloss over these details, even if they appear legitimate. Before you fork over any information, find out exactly what the lender charges and how much your loan will cost by the end of your payment term.
They try to get you to “roll over”. The payday loan cycle starts to get worse when you can’t afford to pay your loan back in full within 14 days. If that’s the case for you, the lender might try to offer an extension of your payment period by an additional 14 days. Of course, these offers don’t come free and are illegal in in British Columbia and Canada, in general. It only leads to more hidden fees and more severe debt.
If you receive a form of income support from the government, you may qualify with some lenders for a payday loan. While it may vary for each provider, lenders may accept alternative incomes like the Canadian Pension Plan (CPP), Employment Insurance (EI), disability assistance, and private pensions. The primary concern is that you’ll be able to make your payments on time. And of course, make sure that you can budget for it.
Will a payday loan hurt my credit score?
Many payday lenders do not check credit reports nor do they report to the corresponding credit bureaus. More often than not, they just want to validate your employment income and make sure that you have a valid bank account. Applying for or taking out a payday won’t necessarily hurt your credit. The exception of course is if you default on your payday loan. It can then go to a collections agency and show up on your credit report as a collections item. Having something in collections can greatly affect your credit rating for the worse.
Why are payday loan interest rates so high?
In British Columbia, payday lenders can charge no more than $15 per $100 borrowed. This actually translates to an annual percentage rate of almost 400%. Credit cards with annual rates of 20% are considered high. The justification for such high rates on payday loans is that they are meant for extremely short terms by comparison. Some borrowers might carry debts on their credit cards for several months. Payday loans on the other hand are meant to be repaid within 2 to 8 weeks maximum. From the payday lender’s perspective, charging a rate like a credit card for such a short term will only earn them under $2 for every $100 exposed. And typically, payday lenders tend to cater to high-risk borrowers. For these reasons, payday lenders are exempt from the usual annual interest rate limits.
Can I Get A Payday Loan Online In British Columbia Loaded Onto A Prepaid Credit Card?
Some payday lenders transfer funds onto prepaid credit cards linked to your payday loan account. You can either pick up the card in person, or the lender will mail it to your home.
Find a Payday Loan Alternative That Works
If you’re looking for an alternative to a payday loan or you’re having trouble dealing with your payday loan debt, Loans Canada can help. We’ll get you matched with the right lender or debt relief service provider in British Columbia. Fill out an application today!