If money is tight and you’re in need of fast cash, a payday loan might be something to consider. These short-term loans are easy to get approved for, making them especially attractive to bad credit borrowers. But in exchange for their convenience comes a high cost.
Find out everything you need to know about payday loans in Newfoundland before you apply.
Are Payday Loans Available In Newfoundland?
Yes, payday loans are available in Newfoundland. Payday lenders in the province must adhere to specific regulations governing these types of short-term loans, including maximum borrowing costs, maximum loan amounts, and time frames within which these loans are to be repaid.
What Makes A Payday Loan? Key Terms and Features
Consider the following before you apply for a payday loan in Newfoundland:
- How much do payday loans cost? Payday loans in Newfoundland cost $14 per $100 borrowed.
- How much can I get approved for? The most you can get with a payday loan is $1,500.
- How quickly do I have to repay the loan? Payday loans typically need to be repaid in one lump sum, with terms no longer than 62 days.
- How quickly can I get the money? You can get funded as quickly as the same day you apply, with the money typically sent via direct deposit or e-Transfer.
Can You Get A Payday Loan? Here’s How To Qualify
Getting a payday loan is relatively easy compared to many other credit products, like a personal loan or credit card. No credit checks are required, and in some cases, you don’t even have to be employed. You simply need a steady source of income, which can include pensions and government benefits. You’ll also need an active bank account to qualify.
Where Can You Find A Licensed Payday Lender In Newfoundland?
To find licensed payday lenders in Newfoundland, you can conduct an online search and look for a license number on each lender’s website. Alternatively, you can visit the provincial government’s Digital and Government and Service NL website, which provides a list of valid payday loan lenders and their licenses.
To help you get a head start on finding a licensed payday lender in Newfoundland, consider the following businesses:
| How Can I Tell If A Payday Lender Is Legit? To determine the legitimacy of a payday lender, consider the following: Are They Licensed? Make sure the lender is licensed in your province. You can find their license number on their website or storefront. What Are Their Reviews Like? Conduct an online search for the lender to see what other customers are saying about them. Be sure to look at trusted websites like Trustpilot or the Better Business Bureau (BBB). Do They Charge Upfront Fees? Steer clear of payday lenders who ask for fees before you receive the loan. This is a red flag of a possible scam. |
How To Apply For A Payday Loan
Getting a payday loan in Newfoundland is relatively easy. Just follow these steps:
Step 1: Find A Lender
The quickest and easiest way to find a payday lender in the province is to use an online loan comparison platform, like Loans Canada. Simply plug in information about your financing needs and your financial profile, and Loans Canada will quickly populate a list of payday lenders that you’re eligible for.
Step 2: Apply
Depending on the lender, you may apply for a payday loan either in person or online. You may need to show proof of identity and income as part of the application process.
Payday lenders often use instant bank verification (IBV), which allows the lender to connect to your bank account through a trusted third-party platform to verify your identity and bank account information without requiring physical documents.
Step 3: Get Funded
Most payday lenders offer same-day approval and funding, depending on the time of application. Funds are typically sent via e-Transfer or direct deposit, though some may also offer fund disbursement through cash or prepaid cards.
How Much Will Your Payday Loan Cost You?
The maximum amount that a payday lender in Newfoundland can charge is $14 per $100 borrowed.
To get an idea of what your loan could cost you, the following chart lists various payday loan amounts and their respective costs:
| Loan Amount | Cost To Borrow | Total Loan Cost |
| $100 | $14 | $114 |
| $200 | $32 | $232 |
| $300 | $42 | $342 |
| $400 | $56 | $456 |
| $500 | $70 | $570 |
| $1,000 | $140 | $1,140 |
| $1,500 | $210 | $1,710 |
Do You Know Your Rights As A Payday Loan Borrower In Newfoundland
You have specific rights when you take out a payday loan in Newfoundland. More specifically, payday lenders are required to comply with Payday Loans Regulations under the Consumer Protection and Business Practices Act.
Before applying for a payday loan in Newfoundland, make sure you’re familiar with the following:
| Loan Amounts | Up to $1,500 |
| Loan Terms | Up to 62 days |
| Cost Limits | Maximum fee of $14 per $100 borrowed |
| Cooling-Off Period | 48 hours |
| Rollovers | Not allowed |
| Lender Licensing | All payday lenders in Newfoundland must be licensed in the province |
| Default Charges | Maximum penalty for a bounced cheque or pre-authorized debit: $20 |
Learn more: Payday Loans: Know Your Rights
What Can You Do If Your Lender Treats You Unfairly?
If you believe that you’ve been unfairly treated by a payday lender in Newfoundland, you can file a complaint with the Digital Government and Service NL’s Consumer and Financial Services Division. Fill out the complaint form and send it to the department in any of the following ways:
| Consumer and Financial Services Division Digital Government and Service NL Government of Newfoundland and Labrador P.O. Box 8700 149 Smallwood Drive Mount Pearl, NL A1B 4J6 | |
| consumeraffairsaccount@gov.nl.ca | |
| Fax | 709-729-6998 |
Alternatively, you can call and speak to a representative at 1-877-968-2600.
Be Sure To Consider This Before Getting A Payday Loan
- Be Cautious Of Scams. Many borrowers who seek payday loans do so because of a financial emergency or because they’re turned down by traditional lenders. Unfortunately, this can make them targets for online scammers who pose as legitimate lenders to steal personal and financial information. Always verify a lender’s credentials before sharing any sensitive personal information.
- Don’t Fall Into More Debt. While payday loans are easy to get, they can be risky if you don’t manage them carefully. Repeated borrowing can lead to a cycle of debt that’s difficult to escape, so only apply if you’re certain you can repay the full loan amount by the due date.
- Fees. If you don’t repay your payday loan as per your agreement, the payday lender can charge you 2.5% interest and $20 for each bounced cheque or dishonoured pre-authorized debit.
- Credit Score Impact. If you default on your loan, your lender can sell your debt to a collection agency, which can impact your credit score.
When Is A Payday Loan Worth It?
As noted earlier, payday loans can be risky given their high cost and short repayment terms. That said, there may be certain circumstances when a payday loan might be worth considering:
- Emergency Expenses: If you face an urgent, unexpected cost, like a car repair or imminent eviction, and you don’t have the money to cover it, a payday loan can be a short-term fix.
- Avoiding Higher Penalties: Sometimes, the consequences of not paying a bill (like late fees, interest charges, or service termination) may be higher than the fees from a payday loan.
- No Alternatives Available: If you can’t qualify for a traditional loan because of credit issues and have exhausted all other alternatives, a payday loan may be your only option.
Alternative Ways To Get Cash Quickly
If your financial difficulties are short-lived and you can still make some bill payments, consider the following options:
- Credit Card Cash Advances: A credit card cash advance lets you withdraw cash from your credit card account, usually at a higher rate than your purchase rate and with additional fees.
- Personal Loans: A personal loan provides you with a lump sum of money to be used for various purposes, and is usually repaid with fixed monthly payments over a specific term.
- Small Credit Lines: A credit line is a flexible loan arrangement that lets you borrow up to a certain limit and pay it back as needed. Interest is only charged on the borrowed amount. One company that offers small credit lines that are easy to get approved for is Bree and Nyble. This service offers interest-free cash advances up to $500 that can be used to cover last-minute expenses or avoid NSF fees.
Need More Help Than A Loan? Consider These Options:
If you’re tired of relying on loans, you can speak to a credit counsellor to discuss debt relief options such as:
| Program | Description |
| Debt Management Program (DMP) | A DMP does not reduce your debt, but allows you to consolidate your unsecured debt over a period of up to 5 years. Your counsellor may also be able to negotiate a stop to the accumulation of any interest or fees. |
| Consumer Proposals | A consumer proposal is a formal agreement with creditors to repay a portion of your debts over a specific period, usually with manageable terms compared to paying the full amount. |
| Bankruptcy | Bankruptcy is a legal process that provides debt relief to consumers who are unable to repay their debts, often involving the surrendering of assets. |
Learn more: Debt Relief Programs In Canada: What Are Your Options?
Government Assistance Programs In Newfoundland
For additional support, you can search for financial assistance programs offered by the government:
| Child Income Support | Learn More |
| Newfoundland and Labrador Prescription Drug Program | Learn More |
| Provincial Home Support Program | Learn More |
| Special Child Welfare Allowance Program | Learn More |
Bottom Line
Payday loans offer quick access to cash, which can come in handy in a financial emergency, especially if bad credit stands in the way of traditional financing. But these short-term loans come with high interest rates and fees, making them very expensive and can lead to a cycle of debt. It’s important to carefully consider alternative solutions and understand the terms before opting for a payday loan to protect your financial health.
