What The Heck is a Faxless Payday Loan?

What The Heck is a Faxless Payday Loan?

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated November 5, 2021

Have you ever heard of a “faxless payday loan”? Many people haven’t. Sure, you’re probably familiar with a “payday loan” or at least heard of it, but how does it differ from a faxless payday loan?

Or are they the same? In order to answer that question, it’s helpful to fully understand exactly what a payday loan is first.

What is a Payday Loan?

Basically, a payday loan is a type of short-term loan that consumers take out in order to cover a pressing expense that they don’t have enough money to pay for. They’re usually made for amounts no more than $1,000, and typically must be paid back by the time their next paycheck comes in.

These types of loans are also known as “cash advance loans” because payday lenders essentially advance you the cash you would be getting on your next payday.

Getting approved for a payday loan is rather simple, and no collateral is typically required. You just need to be over the age of majority in your province, have a steady job, have a bank account, and have valid and up-to-date contact information. No credit checks are done, nor any further financial checks.

While payday loans might be seen as somewhat of a lifesaver in times where cash is needed in an urgent situation, the interest rates that are charged are typically exorbitant. In fact, it’s not unheard of to see interest rates as high as 500% or more on payday loans. With rates that high, it can make it very difficult to repay the original loan amount plus the added amount in interest.

As such, payday loans are often seen as predatory in nature. They charge sky-high rates, often have other hidden fees, and don’t require much of a financial background check on borrowers.

In this way, even borrowers who might not be financially capable of repaying such loans are often approved. In fact, many payday lenders promise guaranteed approval, even for those who likely won’t be able to pay them back.

Check out our infographic about the Payday Loan Cycle.  

What’s a Faxless Payday Loan?

A faxless payday loan is essentially the same thing as a traditional payday loan, except that the documentation required by the lender can be submitted electronically rather than having to be faxed. In this sense, the name makes a lot of sense.

Are you an Alberta resident? Click here to learn about some payday loan changes in the province.

Faxless payday loans are designed to make it very easy for borrowers to apply and get approved for these types of short-term loans. Without having to go through the hassle of faxing documentation, the process is simple and fast.

Are you an Ontario resident? Read this to discover the payday loan changes in this province instead.

Lenders can get the information they require within minutes and approvals can even be given within a couple of hours. Also, repeat borrowers with the same payday lender can go straight to loan approval without having to re-submit their paperwork, since the lender will already have it all on file.

Basically, all payday loans these days can be considered faxless. With the advent of the internet, it doesn’t take much to scan and email paperwork to anyone at any time. While you can still choose to fax your paperwork or visit a payday lender in person, just about every payday loan company accepts applications and documents via the internet.

For information about online payday loans, look here.  

Faxless payday loans are certainly very convenient and can get you the money you need right away, but they come with the cost of soaring interest rates that can make these types of loans very expensive.

Shopping for low-interest rates? Here are some things to consider.

Alternatives to Faxless Payday Loans

Rather than applying for a high-interest faxless payday loan, there are alternatives you may want to consider. Perhaps the best alternative to a payday loan is a personal installment loan.

These types of loans are typically taken out at a bank or credit union and allow a much longer repayment period. Rather than having to repay the entire loan amount in one lump sum in a short time period as is the case with a payday loan, a personal installment loan allows the loan to be paid off in regular installments over an extended period of time.

In addition, the interest rates are not nearly as high as payday loans. This makes it much easier to pay off.

Check out our video for more differences between payday loans and installment loans.

Final Thoughts

Many Canadians find themselves needing fast cash to cover last-minute expenses and sometimes turn to payday loans to obtain the money they require. Faxless payday loans make the application and approval process simple and convenient by not requiring any documentation to be faxed or presented in person.

However, as easy as these types of loans are, borrowers need to be aware that they can be extremely expensive and very difficult to pay back in such a short amount of time.

Need some debt relief for your payday loans? Click here.

Before you take out this type of loan – or any other type of loan – be sure to do your due diligence and make a sound decision that’s best for you.

Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Save With Loans Canada

Special Offers

Earn An Extra 15% Cash Back

Earn An Extra 15% Cash Back

Apply for a Tangerine credit card by December 31, 2021, and earn an extra 15% back (up to $150).*

View Offer
Build Credit With Refresh Financial

Build Credit With Refresh Financial

Build credit while spending money with the Refresh Financial VISA card.

View Offer
Build Credit For $7/Month

Build Credit For $7/Month

With KOHO’s prepaid VISA card you can build a better credit score for just $7/month.

View Offer
Industry Spotlight

What's happening with Canada's credit industry?

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...

Read Post
Find The Best Rate
In Your Region
Best Personal Loan Provider by Greedy Rates

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.