- 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
Ontario residents are just as susceptible to debt problems as any other Canadian. If you’re among them, you might be thinking about payday loans and wondering if they’re the only available solution to your financial worries. Be very careful, because payday loans come with many downsides that could only worsen your financial situation in Ontario.
Payday loans might not be 100% bad for you. In fact, there are some rare instances where they may be useful, such as a serious expense that requires immediate action, or you’ve exhausted all your other options like credit cards. However, be sure that you’re 100% certain that your next paycheck will be large enough to cover the entire cost of your payday loan.
Additional pros and cons of using payday loans exist. Take a look at the following list to see if payday loans are the right option for you.
Yes, payday loans are available in Ontario, provided you are eligible. Payday loans are a method of fast cash that is repaid when you receive your next paycheque or recurring income. Payday loans are the most expensive form of financing in Canada, and while they are easy to qualify for, they have extremely short terms and charge high fees, making them difficult to repay.
Some payday lenders offer loans online, which can be applied for via the lender’s website. Payday lenders typically try to make the application process as straightforward and fast as possible. Many online payday loan applications can be completed in just a few minutes.
Moreover, you’ll usually receive a response within 24 hours after submitting the application. If approved, you can collect the funds through direct deposit or e-Transfer.
Keep in mind that – like any payday loan – online loans adhere to the rules and regulations set out by the province. In some provinces like British Columbia and Québec, additional regulations may apply.
There are some requirements that need to be met in order to be eligible for a payday loan in Ontario. Specifically:
The cost of a payday loan will change depending on how much you’ve borrowed and which province you live in. In Ontario, payday lenders are able to charge up to $15 for every $100 they lend to you.
As an example, if you borrowed $500 and were charged $15 per $100 borrowed:
Note that the example above assumes a 14-day payday loan, for which the APR is 397.07%.
A valuable tool to know is the annual percentage rate (APR), which can give you an idea of how the cost of a payday loan holds up against alternative loans. Given how expensive payday loans can be, a useful comparison can help you make the best decision for your own individual and financial circumstances.
E-transfers are a common form of funding for payday lenders. Following approval of your loan, your payday lender distributes the money via an e-Transfer. If you have an automatic deposit set-up, you can have your funds directly deposited into your bank account.
You can also get your payday loan in cash if your lender has a physical branch location. You’ll have to bring all the necessary documents and identification needed to apply for a payday loan to the in-person office. If approved, you should receive the money on the spot in cash. Similar to the e-Transfer option. Keep in mind that receiving cash may take longer in some instances due to factors like when a branch is open and its hours of operation.
Some payday lenders offer the option of transferring your loan to a prepaid credit card. This is often a useful option if you don’t have a bank account. You can pick up a prepaid credit card at a physical branch or have it mailed to you. However, this option depends on your payday provider so be sure to ask first. Once the loaned funds are loaded into your card, you can use it anywhere Mastercard or Visa is accepted.
While the payday loan cycle can be difficult to overcome for any individual in Ontario and the rest of Canada in general, there are ways of cracking it or avoiding it altogether. Here are some helpful solutions, many of which are offered at Loans Canada:
If you qualify and have the finances to pay your bills on time, your credit cards can save you a lot of stress. While they can also cause bad debt when handled irresponsibly, at least your interest rate is likely to be lower, and you’ll have a minimum payment to help you avoid late penalties.
Working up the nerve to ask the people you know for help can be hard. However, if it stops you from entering the payday loan cycle, give it a try.
If you own or are in the process of mortgaging a home, you may have built up enough equity to cover your various expenses or consolidate your debts. Be careful, however, because, under certain circumstances (ex: second mortgages), your home may act as collateral, possibly leading to a foreclosure if you miss too many payments.
While you will generally need to have decent credit when applying through your bank, there are plenty of alternative and bad credit lenders in Ontario who will grant you one of these installment-based loans. In both cases, however, there’s still the potential for a better interest rate on a larger sum of money with cheaper fees and more reasonable payment terms.
If you fully own a car, you can apply for a “car title loan”, the amount of which will depend on the vehicle’s current market value. Keep in mind, however, that your car’s title will be used as collateral. If you default on too many payments, you could lose your vehicle, so once again, be certain you can afford them before offering up your car.
While you may need a decent income and credit status, one of these loans can help you out of a real jam. If approved, you’ll use one large loan to pay off all your smaller ones, giving you one regular payment and interest rate to deal with, rather than several.
If you’re applying for one of these initiatives, it means that your debt is becoming unmanageable. Here, you’ll work with a certified credit counsellor in Ontario, who will contact your lenders to negotiate a more reasonable payment plan. If the program is accepted, you may even get your payments reduced.
If you’re in bad debt, but a DMP is off the table, you can also hire a licensed insolvency trustee, who will draw up an unbreakable legal contract for an established payment plan between you and your lenders. If approved, you’ll make payments through your trustee, who will pay your lenders for you, again with the possibility for a reduced balance.
Declaring personal bankruptcy is another last resort alternative that could cause long-lasting damage to your credit and finances. However, it may be your only option if your debts are totally unmanageable. At least your debts will be cleared and all lenders/collection agencies will cease to pester you, allowing you to start over with a mostly clean slate.
According to the Payday Loans Act of 2008, payday loan lenders in Ontario must follow certain rules in keeping with the rights of their borrowers, such as:
If you’re thinking about using a payday loan in Ontario to finance something important to you, or if you’ve found yourself trapped in a payday loan cycle, reach out to us today. We’ll put you in contact with better sources of better credit products. Simply apply below!
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