Cash loans offer a great way to get money quickly when you’re in a tight spot. They’re a trusted lifeline for Canadians when they face an unexpected situation. However, they’re not meant to top up one’s bank account, because you’re unable to handle your money properly.
If you find yourself in a sudden financial bind, cash loans can be a good solution. However, you’ll want to follow these 10 quick tips to separate good cash loans and good lenders from the less desirable.
1. Understand How They Work
Cash loans, or payday loans, aren’t like a credit card. You aren’t allowed to carry a balance. Instead, you need to pay a cash loan off quickly and usually in one payment. Normally, repayment occurs on your first payday after a full two-week pay cycle. Some provinces allow up to 62 days to repay, but never more.
The maximum, legally-permitted cash loan amount in Canada is $1,500. However, lenders often base your maximum on whatever your wage and debts can bear.
2. Look for a Licensed Lender
Any financial company can offer cash loans, but that doesn’t mean they’re all good lenders. Some are licensed and some aren’t.
Unlicensed lenders may use illegal tactics to collect what you owe. Even worse, crooks could be targeting your data and you could get caught up in a scam.
Consumers should definitely choose a licensed lender since their practices and products have government oversight. For instance, they can only charge so much for interest. Depending on the province, legislation may limit the maximum loan amount to ensure you can’t take on more debt than you can afford.
Additionally, licensed lenders can’t charge open-ended fees and penalties. These regulations protect consumers. However, anyone who borrows from an unlicensed lender won’t enjoy these safeguards. If the lender handles your cash loan inappropriately or charges exorbitant fees, you have little recourse.
Licensed lenders are also legally obliged to provide clear information to a borrower. Their website should provide accurate answers to common questions and multiple ways to contact the lender if you have questions.
Most importantly, you should be able to find information regarding fees, penalties, and your responsibilities beforehand. Basically, a licensed lender must tell you upfront how much it will cost you to borrow before you provide your sensitive data.
3. Check for a Long Lending History
There’s no shortage of Canadian lenders for cash loans. However, some are fly-by-night organizations you won’t want to borrow from.
Check whether the company mentions how long they’ve been lending in Canada. Also check whether they have Better Business Bureau accreditation. This demonstrates the lender’s willingness to accept criticism. It also provides a way for consumers to seek resolution if they have a problem.
Finally, look at the lender’s ratings on independent sites such as TrustPilot. They provide a wide range of unbiased consumer reviews. These are generally more dependable, because they come from verified users. Google reviews can come from anyone, whether they have first-hand experience with the business, or not.
4. Choose a Canadian Lender
Don’t assume a company lending in our country is Canadian. Many multinationals open a subsidiary to tap into the Canadian market, but their actually based elsewhere.
The problems with dealing with a cross-border lender are manyfold. For instance, they may not operate within Canadian time zones. Their customer service representatives may not be Canadian either. Even though their lending in Canada, the laws in their region could take precedence if there’s ever an issue.
Why deal with a lender that doesn’t know BC from Newfoundland or Toronto from Calgary? Choose a Canadian lender with a toll-free number and speak to a real person to get to the heart of the matter quickly. You’ll also have the added assurance that the company is governed by Canadian laws and under the scrutiny of Canadian institutions.
5. Apply Online
Online cash loans are more convenient. You don’t need to make an appointment, visit an office, or fill out lengthy paperwork. The process is simple, quick, and painless.
You can usually complete and submit your application form in about 15-minutes. Apply at any time from any device, but if you submit outside of business hours you may need to wait a little longer for your funds. Nonetheless, it is still far quicker than an in-person application.
Online lenders won’t ask for much information besides your name, address, email, etc. However, they will need your banking information to verify your income and to deposit funds if you’re approved. Other than that, an online application form is very straightforward.
6. Choose a Lender That Uses a Soft Credit Check
Cash loans may or may not involve a credit check. This is because cash loans are considered small loans when compared to other lending options.
However, you will want to ensure that the lender isn’t damaging your credit if they do decide to check. A hard credit inquiry negatively impacts your credit file and remains there, even if the lender turns you down for a loan.
Luckily, some lenders use a soft credit check instead. This does not reduce your credit score. It is generally used for informational purposes, but is not the sole criteria used for determining eligibility for cash loans.
Lenders that use a soft credit check normally have their own financial scorecard. They will review your life circumstances, but they seldom place as much emphasis on credit as traditional lenders. They simply want to see a steady income and a good debt-to-income ratio which demonstrates you can comfortably repay your cash loan.
7. Check Their Response Time
When you’re looking for cash loans, the last thing you want to do is wait for days or weeks for your money.
Check how long the lender will take to make a decision on your application. They all mention “fast” or “quick, but does that mean? Is it minutes, hours, days, or weeks?
A good lender has an automated system that reviews applications almost instantly. They should send you their decision within minutes and that’s important when you’re in a hurry for cash.
8. Look for Digital Document Signing
Unfortunately, many cash loans involve visiting an office to sign your loan documents. This applies to supposedly “online” cash loans, as well as when you apply in-person.
Check that the lender offers digital document signing. The company should be able to send your loan documents to you very quickly once you agree to their terms. In turn, you should be able to sign them digitally, return them within minutes, and set off the funds release process almost instantly.
9. Find Out How Long Funds Release Takes
There’s no point borrowing from a company that doesn’t get the money you’re your hands quickly. Check what the lender promises regarding funds release after you sign your loan documents. Is it minutes, hours, or days?
A good lender can usually get the money in your bank account within an hour, providing you forward your signed documents to them during business hours. If you sign them outside of business hours, you should receive your money the next business day, at the latest!
10. Review Lending Requirements
Many lenders won’t tell you their borrowing requirements upfront. That’s frustrating, since you’re already pressed for time. Luckily, GoDay does not operate like that.
We’re happy to provide you with our requirements so you know whether you should apply, or not. We’ve helped many Canadians and if you have a steady job, chances are you can easily access our cash loans. It is possible to overcome any fears over borrowing online too. Here’s our basic lending requirements for our cash loans:
- Canadian resident
- At least 18-years old
- Permanent address
- Active account with a Canadian bank or credit union with recent transactions
- Paid regularly through direct deposit
- Valid email
- Active cellphone or home telephone number
GoDay also offers a bonus. Some applicants may qualify for an installment loan when they apply for a payday through our company. Installment loans generally offer more time for repayment and better terms. There’s no need to fill out another application form. We’ll automatically notify you and you’ll enjoy greater flexibility and more time to repay too.
Why You Should Choose GoDay for Your Cash Loans
You’ll be happy to know that GoDay fulfills all the important characteristics mentioned above and we:
- Follow regional laws and are licensed to lend in BC, AB, SK, MB, ON, NB, NS, and PEI
- Have issued cash loans to Canadians since 2012
- Obtained Better Business Bureau accreditation in 2015 and have an A+ rating
- Have an overall rating of “Excellent” with TrustPilot
- Are and have always been a Canadian company
- Operate completely online
- Will use a soft credit check if we check your file
- Let you know within minutes whether you’re approved
- Offer digital loan document signing
- Normally release funds within an hour if you sign your loan documents during business hours
- Offer direct bank deposit or Interac® Email Money Transfer (conditions apply).
Whether you are ready to start the application process or want more information, please visit our website. Let us show you why so many Canadians choose GoDay for their cash loans.
