Life is full of ups and downs, as can be true with our financial situation. While we can try and budget and prepare for all of life’s expenses, there are often unplanned situations or emergency costs that throw this planning out the window.
For many Canadians, seeking out a quick cash instalment such as a payday loan can be an incredible financial resource. While payday loans are often accessible and fast, understanding who you are borrowing money from is vital. It's always a good idea to check a lender's reviews before making your decision.
To keep you informed and empowered, here are some top tips on understanding payday loans in Canada and direct lenders:
If you are looking for quick cash up to $1500, a direct payday loan provides what can be considered an advance on your regular paycheck. While it is not actually linked to your employment, it is a short-term, unsecured loan that uses your employment and income as approval information. There is no collateral needed, meaning it can be a fast and effective way to speed up your pay cycle.
These days payday loans can be applied for swiftly and funds transferred in minutes! They are generally easier to qualify for than a traditional bank loan, as they are not solely based on credit.
A direct lender is a non-bank creditor that a borrower applies to directly. And unlike a loan matching service, there is no middleman. A direct lender is what you likely know as a loan agency, and can be either online or in-person.
While a quick search may make it seem easy, the choice of loan agencies can be overwhelming. It’s important to take the time to research direct lenders thoroughly and read through and contractual agreements before signing.
As you will be borrowing funds directly, each lender will have their own specific terms and conditions. But rest assured, while this is different from a bank loan, lenders must be licensed in Canada, and therefore borrowing from a reputable agency will still be a safe financial move.
While you may automatically think of a bank when you think of a loan, applying for a loan from a direct lender is different in many ways:
Every lender has specific minimum criteria that must be met - if they aren't met, then the applicant won't be approved for a loan. Direct lenders reserve the right to reject applicants that they deem too high a risk to qualify. This is true of every licensed, reputable lender in Canada. Whether it's in Saskatoon or Nanaimo.
If you have a low credit score, no credit score, or have been denied a loan in the past, you may believe that you are not eligible to apply for funds from a bank or a direct lender. While traditional bank loans are harder to come by, there are many direct lenders these days that specialize in bad credit lending.
Many direct lenders don’t even require a minimum credit score! Depending on many variables, you may still be approved for an amount up to $1,500. Even if you don’t have the required credit, be prepared to provide your credit details as a form of identification, and to help validate your income and employment details.
At My Canada Payday, we believe that your loan eligibility comes down to more than your credit score. For this reason, our scoring system relies primarily on your online banking details to show that you have the capacity to repay the loan, and less emphasis on how your credit activity has been historically.
All you ever wanted to know about direct lenders