{"id":7108,"date":"2022-01-07T18:48:36","date_gmt":"2022-01-07T23:48:36","guid":{"rendered":"https:\/\/goday.ca\/blog\/?p=7108"},"modified":"2022-04-23T00:23:25","modified_gmt":"2022-04-23T04:23:25","slug":"a-quick-guide-to-short-term-loans-in-canada","status":"publish","type":"post","link":"https:\/\/goday.ca\/blog\/a-quick-guide-to-short-term-loans-in-canada\/","title":{"rendered":"A Quick Guide to Short-Term Loans in Canada"},"content":{"rendered":"\n
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Short-term loans in Canada can offer you quick cash when you need it. They are often a good option if you don\u2019t want to borrow against a credit card or from family and friends.<\/p>\n\n\n\n

However, the market is saturated with lenders. As a result, you will need more information to separate good products and lenders from the less desirable. That\u2019s where this guide comes in.<\/p>\n\n\n\n

We\u2019ll walk you through your options, when a short-term loan is a good choice, how each option works, and why lender licensing is so important for you as a consumer. We\u2019ll briefly discuss the differences and limitations of short-term loans in various regions in Canada. Finally, we\u2019ll discuss how to find a reputable lender.<\/p>\n\n\n\n

Hopefully, after reading this you\u2019ll have a good overview of short-term loans in Canada. Knowledge is power and we want you to make informed financial decisions.<\/p>\n\n\n\n

Short-Term Loan Types<\/h2>\n\n\n\n

Basically, you\u2019ll find two types of short-term loans in Canada: payday loans and installment loans.<\/p>\n\n\n\n

Payday loans<\/a> offer a relatively small sum of money. You can either apply at a physical location or online. Of course, applying online is more convenient since you don\u2019t need to travel, park, and fill out paperwork in-person.<\/p>\n\n\n\n

In both cases, payday loan lenders usually limit the maximum available to you to $1,500. However, some lenders base the maximum on a percentage of your net salary which can result in a lower amount. If it is your first time borrowing from a particular lender, they may also offer less than $1,500 the first time around.<\/p>\n\n\n\n

These short-term loans in Canada are normally repaid quite quickly. In some provinces and territories repayment occurs through a single payment. Other regions allow you to divide it into several payments However, repayment usually occurs within weeks, not months.<\/p>\n\n\n\n

Installment loans work differently. While you may be able to apply for a small amount, most have more substantial minimums. Nonetheless, a few do grant installment loans for as little as $500.<\/p>\n\n\n\n

Installment loans offer more flexibility. You can spread your repayment over a longer period and decide on a payment frequency that suits your life. Some lenders will review your payday loan application and if they like what they see, they automatically offer you an installment loan instead.<\/p>\n\n\n\n

Both types of short-term loans usually depend on your income. Traditional lenders may rely heavily on your credit score, while non-traditional lenders don\u2019t. They may check your credit, but they also consider many other factors.<\/p>\n\n\n\n

Appropriate Uses for a Short-Term Loan in Canada<\/h2>\n\n\n\n

Short-term loans in Canada are meant for temporary, urgent financial needs. they can be an effective financial tool when you know you have money coming in soon, but you need access to cash now.<\/p>\n\n\n\n

If you find you are constantly borrowing and repaying small loans, you are probably living beyond your means and will need to alter your spending habits.<\/p>\n\n\n\n

These are just a few scenarios where short-term loans in Canada might come to the rescue:<\/p>\n\n\n\n