- 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 you build your credit history in Vancouver, you’ll discover many different credit products, each with its own upsides, downsides, and scenarios where they would be beneficial or harmful for your finances. One product that you’ll frequently hear about in Vancouver is the payday loan. You may also hear that you should avoid them. Confused? Don’t worry, because Loans Canada has some answers.
Want some more information about loans in Vancouver? Check this out.
You can get a payday loan either online or at a physical establishment in Vancouver and Canada, in general. Usually, you’ll be allowed to borrow $1,500 or less. The loan must then be fully repaid within 14 days, the general timeframe within which you receive a paycheck. If approved, which is easy given the lack of documentation required, you’ll receive your funds within the same day. All you need is proof of:
No credit check, just fast money. Sounds pretty reasonable, right? Unfortunately, payday loans come with really high-interest rates and penalty fees that can cause severe debt when handled irresponsibly. This can make a payday loan extremely dangerous for your finances under the wrong circumstances. While Vancouver payday loan lenders are not legally permitted to offer a “rollover” option (allow you to apply for a second loan to pay for the first one), the high-interest rates can cause you to miss your final payment. You’ll then be charged a late penalty. This, coupled with the initial loan cost, can make you spiral into debt, especially if you don’t have a good income. Afterward, you may even have to rely on further payday loans to get out of the debt.
Check out this infographic to know more about the payday loan cycle.
There are a few situations where payday loans might be beneficial in Vancouver, such as:
Need to handle a financial emergency? Read this for a solution.
Payday loans are definitely not beneficial when:
Luckily, the federal and provincial governments have established rules that reduce the damage that payday loans can cause and lenders must follow them in order to remain legal in Vancouver. These rules include:
Click here to know more about your payday loan rights.
As we said, legitimate payday loan lenders must operate within the government-appointed limits. However, scam artists and other predatory lenders are still finding ways to avoid detection. These organizations go after those in Vancouver and Canada, in general, who don’t qualify for regular credit products. Desperate to deal with a financial crisis, unsuspecting borrowers give up their personal and banking information, which is just one of the ways a predatory lender can ruin their finances.
Take a look at these other financial scams in Canada.
They have no physical or reputable presence – Most payday loan lenders should have an actual location you can visit or report to the authorities if necessary. However, there are legitimate lenders that do operate online. The key to spotting the fake ones is when they do not have any real customer reviews or a page in the Better Business Bureau database.
Searching for debt relief from predatory loans? Look here.
If you’re already stuck with a bunch of payday loan debt or if you want to avoid this option entirely, there are definitely other solutions available in Vancouver. Some of these solutions may not be appropriate for your personal or financial situation, so talk to a financial advisor or a credit counsellor before you make your choice.
Another credit product that you might have heard about in Vancouver is the personal loan. Similar to a payday loan, you’ll apply for a set amount of money and, if you’re approved, you’ll be given a certain period within which you’ll have to pay it back in full. Personal loans, however, can be much more beneficial and less dangerous for your finances.
Trying to get the best personal loan for your finances in 2018? Read this to know how.
You might be wondering which payment option would work best for your expenses. That really depends on your own financial health. Remember, every credit product has its pros and cons. So, before you apply for a payday loan in Vancouver, ask yourself questions like:
This last question is often the most important. In reality, payday loans should only be considered when you have no other option. Even if they are a quick and easy solution, defaulting on your payday loan can lead to severe penalties and, ultimately, even worse debt issues than you had before. While missing, say, a credit card payment also results in a penalty fee and interest being charged on the unpaid balance, you have a bit more leeway before things become really bad. Generally, you can be 60-90 days late on a credit card payment before your account would be frozen and turned over to a collection agency. While you should never make this a habit, it would still be less damaging than your payday loan debt could end up being.
Depending on how bad your financial situation is, a payday loan can be an easy last resort. However, as we said, they can be very dangerous when not handled responsibly. If that thought makes you nervous, contact Loans Canada instead. We can get you connected with the best payday loan alternatives in Vancouver.
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