A Canadian payday loan can offer the money you need to fulfill a modest financial need for the short-term. It may a good alternative if you are unable to borrow from friends or family or when you don’t have access or don’t want to use other credit products.
While many lenders offer payday loans, you won’t to borrow from some lenders. Here’s what you should know about payday loans and what you should consider before deciding on a lender for a Canadian payday loan.
What Makes a Payday Loan Different?
A payday loan differs from credit card, because you can’t carry a balance. You are given a lump sum, but must repay all of it relatively quickly. Typically, repayment coincides with your regular two-week pay cycle. However, some provinces allow a slightly longer time for repayment.
A payday loan isn’t like an installment loan either, because these loans typically offer higher limits and equal monthly payments to repay your loan over time. Licensed payday lenders in Canada can only lend up to $1,500. However, if it is the first time you’re borrowing from a lender, they may grant you less credit.
Responsible lenders won’t issue you more than one payday loan at a time either. However, once you repay your first loan according to your agreement you’re welcome to reapply and it is usually easier to borrow again. You may qualify for a higher amount too.
Be wary of any lender that allows you to have more than one payday loan at a time. You could easily find yourself in a very bad financial position making it impossible to repay your loans.
Why Choose a Payday Loan?
Most people face a time when they need temporary financial help. You know you’re going to have money soon, but you need it right now.
Luckily, a payday loan can help in this situation. It isn’t meant for shopping sprees, but it can definitely get you out of a financial jam. Here are a few situations when a payday loan might be appropriate:
- You didn’t budget correctly and you have a payment coming up before you’ll get your next pay cheque
- Your vehicle broke down and you need it for work
- The refrigerator in your home died and all your food is spoiling
- A friend or relative needs cash to deal with an urgent situation
Of course, these are just a few of the ways a Canadian payday loan might be used. Whatever your pressing need, if you know you have money coming in soon a payday loan could be a viable solution.
Is The Lender Licensed?
This should be one of your most important considerations when choosing a lender. Almost any private company can offer to lend you money. However, unlicensed lenders can also charge whatever amounts they want for interest. They can also levy exorbitant penalties should you fail to repay your loan as agreed.
Conversely, licensed lenders are governed by strict provincial laws. They can only charge up to the maximum amount of interest allowed as stated in regional legislation. They aren’t allowed to charge the hefty penalties that unlicensed lenders can charge either.
Unlicensed lenders may also offer you more than you can reasonably afford to borrow. This can lead to an unmanageable debt load and even a defaulted loan. A defaulted loan can seriously damage your credit and trigger very high fees to further increase what you owe.
On the other hand, licensed lenders have a mandate to lend responsibly. They don’t want you to incur more debt than necessary. As a result, they usually can’t lend you more than 50 percent of your take home pay. Otherwise, you could struggle to pay other expenses or fail to repay your loan.
Additionally, unlicensed lenders can hide their fees and penalties within their paperwork. You may not realize what you’ve signed until things go wrong. Your complaints could be ignored and you may not have a legal leg to stand on since they’re not governed by provincial laws.
Licensed lenders are legally compelled to clearly reveal all fees and penalties in their documentation. If they fail to do so or they try to charge more than allowed, you have recourse through Consumer Affairs. This certainly isn’t the case with unlicensed lenders.
Luckily, GoDay is a licensed lender in BC, AB, SK, MB, ON, NB, NS, and PEI. We follow all payday loan regulations for each region precisely.
Is The Application Process Easy?
Many payday loan lenders operate out of brick-and-mortar stores. This can be very inconvenient when you want money fast to deal with a sticky situation. Who has time to visit an office, fill out paperwork, and wait?
Some lenders do offer online payday loans with a much simpler and quicker application process. Just remember to check whether they are licensed. Otherwise, you won’t be protected by regional laws.
A licensed lender will always ask where you live at the beginning of the application process. This automatically applies the allowed borrowing costs for your region. You can see whether the amount seems reasonable even before you provide them with your personal information. An unlicensed lender may not be as straightforward.
What Do You Need to Qualify?
As the saying goes, “If it seems too good to be true, it probably is”. If a lender guarantees a high rate of approval, asks for little information, and doesn’t tell you what’s involved, you’ll probably want to steer away from them.
Lenders like these certainly aren’t transparent and may not be honest or trustworthy either. If you’re wondering what GoDay’s requirements are for a Canadian payday loan, here you go:
- At least 18 years of age and a Canadian resident
- Have a permanent address
- You have an active Canadian bank or credit union account
- You’re paid regularly through direct deposit
- You have a valid email and an active cellphone or home telephone number
Will Lenders Check Your Credit?
Once again, this depends on the lender. However, since payday loans are for relatively low amounts a lender wouldn’t normally do a hard inquiry that appears on your credit file. Check the fine print to make sure they don’t.
GoDay uses its own custom scorecard to determine whether we’ll give you a loan. If we do check your credit, we use a soft inquiry that does not appear on your credit file.
We’ll let you know within minutes if you’ve been pre-approved and include our terms, including interest, fees, and penalties. Certain applicants may qualify for an installment loan instead of a payday loan which generally offers more flexibility and a lower interest rate too.
Whichever loan you are offered, all you need to do is agree to the terms. We will send you loan documents to sign digitally. If you don’t want to borrow, no problem. You’re under no obligation.
How Long Until You Receive Your Money?
Once again, this depends on the lender. However, we can tell you GoDay strives to get the money in your bank account within an hour. Of course, this depends on the time of day you apply since our online platform accepts applications 24/7. Nonetheless, if you apply within regular business hours chances are you will get you money quickly.
On the agreed repayment date, everything’s handled automatically too. Your payment will come straight out of your bank account. That’s it. No fuss, no muss.
A GoDay Canadian Payday Loan
Here’s a quick summary of what our company has to offer to make your lender decision simpler:
- GoDay has issued online payday loans in Canada since 2012
- We’re licensed in BC, AB, SK, MB, ON, NB, NS, and PEI
- Our company is a member of the Canadian Consumer Finance Association which represents most of Canada’s regulated providers of payday loans
- We’re a member of the Better Business Bureau with an A+ rating
- Our TrustPilot overall rating is “Excellent” and includes over 1,400 customer reviews
- GoDay’s application process usually takes less than 15-minutes
- We safeguard your data and never use it for anything other than the loan process
- Everything’s online, including signing your loan documents
- We always let you know what’s happening during the payday loan process
- We’re 100% Canadian – we live and work here and our customer service representatives are Canadians
- You have multiple customer service options including a toll-free number, email, website support, and an in-depth online FAQ section
- Our website includes financial resources including tools, worksheets, and links to helpful information
- We’re totally transparent and we never hide information from you
- You’ll get your money quickly – we use the fastest tools in the industry to ensure you get your cash in as little as one hour once you’ve signed your loan documents
- Payment options include 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 over other payday lenders.