Payday Loans in Canada - Compare Online Lenders | Finder Canada (2023)

People often turn to payday loans when there is a little more month left at the end of the money. According to the Financial Consumer Agency of Canada, most payday loan borrowers use the money to cover necessary expenses like bills or unexpected expenses that are due before payday. We'll help you understand what a payday loan is, what to consider before borrowing, how they are regulated, and some alternatives to these expensive loans.

What is a Payday Loan?

Payday loans are high-interest loans of up to $1,500. These loans are typically repaid when your next paycheck is deposited into your account, hence the term payday loan. They are also often referred to as "cash advances". In Canada, payday loans are regulated at the provincial level, with the exception of territories that are federally regulated.

Where Can You Get Payday Loans In Canada?

If you need a payday loan, you can apply for it either online or in a physical store:

Payday loan optionsFast Facts
online lenders
  • Fast and easy
  • Apply for and manage your loan from a phone app or website
  • No documents need to be faxed
  • Receive your funds via e-transfer within minutes of approval
Lenders in store
  • Some lenders have extensive branch networks
  • You can apply at a store near you
  • You must bring the required documents with you
  • Get instant approval

How much do short-term loans cost?

Payday loans are one of the most expensive ways to borrow money. The annual percentage rate (APR) for payday loans is very high, often between 390% and 780%. For comparison, the APR for credit cards ranges from 12% to 29.99%, and the APR for personal loans ranges from 5.4% to 47%.

Depending on the state, the fees for your loan vary. For example, in Ontario you pay $15 for every $100 you borrow, while in Newfoundland you pay $21 for every $100 you borrow.

Maximum payday loan borrowing costs per state

Please always refer to your contract for the exact repayment amounts and costs, as these may deviate from our results.

provinceMaximum allowable borrowing costs
Alberta, British Columbia, New Brunswick, Ontario und PEI$15 per $100 borrowed
Manitoba, Saskatchewan and Nova Scotia$17 per $100 borrowed
Newfoundland and Labrador$14 per $100 borrowed
Northwest Territories, Nunavut and YukonUp to $60 per $100 borrowed
QuébecLimit to 35% annual interest (AIR)

Payday loan repayment example

Here's an example of how much a $500 payday loan would cost in BC:

  • Credit amount: $500
  • Loan period: 14 days
  • Rental Fee: $15 per $100 = $75
  • Total redemption amount: $575
  • APR: 391%

What Other Fees May Incur With Payday Loans?

If you delay or miss a refund, you may be charged additional fees, including:

  • Late Payment Fees.If you default on a repayment and don't notify your lender beforehand, you'll likely be charged a fee.
  • Bounced check or failed direct debit.If your payment fails, you will usually be charged a fee.

How are payday loans different from personal loans?

There are some key differences between payday loans and personal loans. This includes:

  • Payday loans have shorter terms.
    Payday loans get their name because you typically have to repay your loan by your next payday. They are designed as short-term solutions to your financial problems. When you apply for a loan, the lender will ask you how often you will be paid to determine your final repayment date.
  • Payday loans have higher interest rates and fees.
    Because of their short-term nature and accessibility, payday loans have a much higher APR than other forms of credit. Even with provincial and territorial regulation, APRs often reach well over 300%, which is surprisingly high compared to typical personal loan interest rates of 2-47%. Therefore, consider the full cost of a payday loan before applying.
  • Payday loans have smaller loan amounts.
    How much you can borrow depends on the province or territory you're in, but you can typically borrow $100 up to a maximum of $1,500.
  • Payday loans allow quick access to cash.
    Most payday lenders will provide you with a decision on the spot or within 60 seconds. By clearly verifying your identity and income, you can receive the funds immediately upon approval.

Compare payday loans

What are the benefits of a payday loan?

When you apply for a payday loan, some of the benefits are:

  • Fast and easy.You can usually apply for payday loans online in less than 10 minutes, get an instant decision, and get instant funding if approved.
  • Bad credit doesn't matter.Payday lenders shift the focus from your creditworthiness to your ability to repay your loan. As long as you can show that you have a stable income to pay off your loan, you should be safe.
  • Income from non-employment is fine.Unlike most personal loans, you can use non-work income, such as B. Use government benefits to qualify for a payday loan.

Are Payday Loans a Bad Idea?

Payday loans are not viewed positively because of their extremely high fees. Customers in dire need of financing turn to payday loans because they're easy to obtain and offer quick financial relief — but they can also plunge borrowers into a cycle of debt. Before taking out a payday loan, make sure that after paying off your loan you will have enough income to pay off other debts or expenses. Otherwise, you might find that you need another payday loan to make up for the lack of income.

Before applying for a payday loan, consider the following:

  • Are you eligible for cheaper loans?You may qualify for a cheaper funding source.Learn more about payday loan alternatives.
  • Will the repayments be manageable for you?Find out if the payday loan can handle your current budget before proceeding. Failure to refund may result in late payment and NSF charges.
  • What are you using the loan for?Payday loans are an emergency solution and are not intended to fix long-term financial problems. If you're having significant financial problems, consider getting credit counseling.

Payday Loans in Canada - Compare Online Lenders | Finder Canada (1)How to apply for payday loans

While the application varies from lender to lender, these are the typical steps to follow when completing your application:

  1. Click on the green "Visit Website" button above.orin the selection below, or visit a lender's website.
  2. Provide information about yourself, including your contact information and social security number.
  3. Enter your employment information or benefit information if you receive government benefits such as pension, EI, or welfare.
  4. Provide information about your monthly income, including the frequency of your payments.
  5. Enter your bank account details and agree to electronic transfers. Confirm the site is secure before providing this information.

You must read a lender's terms of service and privacy policy before submitting your application. theBest Payday Loan Providerswill always have a secure online application and state the final amount of your loan so you know exactly how much it will cost to borrow. Payday lenders may not charge more than the amount limited by provincial regulations.

  • Eligibility differs between lenders and provinces; In general, however, the following minimum criteria must be met:

    • Age. You must be of legal age in your province or territory.
    • Residence.You must be a Canadian citizen or permanent resident with a valid Canadian address.
    • Income.You will need proof that you have some form of income, be it employment income or government benefits.
    • Employment.Some lenders require you to be employed; However, some will accept you if you are self-employed or on government benefits or welfare.
    • Bank account.If you are applying online you will need a working bank account. If you are applying in person at a store, you may not need a bank account.

    Note:Keep in mind that meeting basic eligibility requirements does not guarantee approval of a payday loan.

    • Valid ID with name and address
    • Valid phone number
    • Proof of income with name, address and telephone number of employer or government benefits or capital gains
    • Net and Gross Income Amounts
    • Bank account information (current account, sort code and institute numbers)

    Note:Payday lenders may ask you to log into your bank account on a secure and encrypted online portal, but they will not ask you for your username and password directly.

Am I Eligible for a Payday Loan If…

  • do I get a pension?

If you are retired or physically disabled, you can still access a line of credit, personal loan, or payday loan. Some lenders consider your pension as income, so you may still be eligible depending on your financial situation and why you need the loan.Learn more about loans for retirees.

  • do I receive social benefits?

Some payday lenders and institutions consider welfare payments as income, so you may be eligible. It generally depends on how much you earn, what financial situation you are in and what payments you receive. Contact a lender to find out if you are eligible.Learn more about payday loans for welfare recipients.

  • Do I have bad credit?

It is possible to get onePayday loans with bad credit. When reviewing your application, lenders place less emphasis on your credit score and more on your income.

List of payday lenders that accept government benefits

iCASH Zahltagdarlehen

  • Receive up to 20% cashback
  • Borrow $100 - $1,500
  • APR and repayment terms vary by province

Go to the site

Cash Payday Loans

  • Special offer for the 1st rental
  • Borrow $100 - $1,500
  • APR and repayment terms vary by province

Go to the site

GoDay Zahltagdarlehen

  • eTransfer & Direct Deposit
  • Borrow $100 - $1,500
  • APR and repayment terms vary by province

find out more

MoneyMart Payday Loans

  • 24/7 cash via direct deposit or eTransfer
  • Borrow $120 - $1,500
  • APR and repayment terms vary by province

find out more

What Happens After I Apply for a Payday Loan?

Once you submit your payday loan application, lenders will give you a decision within minutes. If you apply online, lenders can usually do itPayday loans by e-bank transferwithin minutes or deposit the funds into your bank account in 1 business day or less. When you apply in store, you can receive your money in cash, by check, or by e-bank transfer.

When it's time to repay, your lender will deduct the principal and any fees you owe directly from your bank account. Make sure you have enough funds in your bank account by the due date to avoid penalties.

Remember that you are under no obligation to accept the terms of your payday loan offer. If you have read the terms before signing, you can always refuse the loan offered. Once you have signed the contract, some provinces allow a cooling off period (usually 2 days) during which you can cancel the payday loan without penalty.

Do Payday Loan Lenders Check Your Credit?

Some payday loan lenders, such asmoney market, does no credit check when it comes to approving payday loans or not. However, other payday loan providers in Canada collect your credit report from one of the two main credit bureaus, Equifax and TransUnion. Those who don't do a credit check need your bank statements so they can see your income and debt.

Reasons you may have been rejected

While your lender should provide a reason why you were not approved for a payday loan, these are 4 of the most likely reasons:

  • You are not employed or your income is too low.
  • You already have a payday loan or recently borrowed one.
  • You have too much current debt.
  • You made mistakes in your application.

How do I stay on top of my payday loan repayment?

Ask yourself these questions to ensure that a payday loan is a viable financial option that won't cause you long-term problems:

  • How much are my monthly bills?Write down and add up your rent or mortgage, utilities, and other monthly expenses.
  • What are my living expenses?Think about how much you need for groceries, gas for your car, a few bucks for morning coffee, and other living expenses.
  • How much of my paycheck do I have left?Subtract your monthly expenses from your monthly after-tax salary. If you have enough leftover to cover your payday loan repayment, your loan is affordable.

Ultimately, you need to know that you can afford to pay off your loan on terms while still having enough cash to pay for your regular expenses. Otherwise, you may find yourself in a recurring debt situation.

What happens if I don't repay a payday loan?

If you fail to repay a payday loan, you will be charged fees and your loan will default.Often, payday lenders hire collection agencies to try to collect the loan, and when this happens, the collection agency can report your loan to the credit bureaus, which can negatively affect your credit score.

If you are unable to make a payment on your payday loan, contact your creditor immediately to explain your situation. They might be willing to work with you to create a plan to help you pay off your debt more easily.

Can You Renew Payday Loans?

Extending your loan just once can double the cost and make repayments even more difficult in the future. Because of this, most provinces have made direct rollovers illegal. If you want to take out another loan, you must first pay off your current loan and then apply for a new loan again.

Some lenders have benefits for returning borrowers, such as: B. higher loan amounts and faster financing. However, don't get into the habit of taking out payday loans. These are short-term solutions that often trigger a “debt spiral”. The Financial Consumer Agency of Canada reported that 7% of respondents take out another payday loan to pay off their first. Keep reading our guidehow to get out of payday loansto learn practical ways to get out of this cycle of debt.

What Can I Use Instead of a Payday Loan?

A payday loan can be an expensive way to get emergency financing. Consider these payday loan alternatives before taking out a loan:

  • state or federal aid.If you find that you need ongoing financial assistance, you should look into provincial or federal programs. Housing benefit and other assistance could help lower your bills so you can avoid payday loans.
  • Friends and family.If you are in financial distress, your friends and family may be ready to help you. It doesn't necessarily have to be a loan - a ride while your car is in the shop or a babysitter can relieve your budget.
  • installment loans.These types of loans are designed for small amounts of money, but you repay your repayments in installments over time, as opposed to a lump sum like a payday loan. You canFind out more about installment loans here.
  • Credit union loans.Credit unions and other small banks sometimes offer small loans to their existing customers. Salary advances can be requested and repaid on the next payday, often at more favorable rates.
  • bank overdraft.If your bank account is in good shape, you may be eligible for a small personal loan or overdraft. Contact your current bank to discuss your eligibility.
  • Prepayment by credit card.get oneCredit card cash advancecan be much cheaper than payday loans. You can usually get a cash advance up to a percentage of your credit limit. You will typically be charged between 24% and 36% for credit card cash advances.

bottom line

A payday loan is best saved as a last resort when you find yourself in financial distress. Once you have weighed the alternatives and think a payday loan is right for you, you canCompare your options for payday loansto find the best available offer.

Frequently asked questions about payday loans

  • Yes, it's possible. Check the payday loan regulations in your province. In many provinces, lenders must allow you to prepay your loan without fees or penalties.

  • State and federal regulations apply to most lending channels.especially payday loans. Rules and laws often require lengthy explanations and descriptions of what you are getting into, resulting in lengthy contracts.

    As hard as it may be to pull through, read your contract carefully so you fully understand the terms of your loan. Depending on where you live and which lender you borrow from, your potential fees can vary wildly. For example, if you know how much a late fee costs, you can prepare for a deferred payment if necessary.

  • If you have fallen victim to a payday loan scam, take quick action to avoid the repercussions. First, contact your bank to freeze your account so others cannot access it.

    Next, make a report to the police. If money was withdrawn from your account before you realized the lender was a scam, a police report will validate the theft. It shows that you realized the charges were not made by you, and your bank can use the police report to clear the charges. Even if you haven't had your money stolen, filing a police report can help prevent others from falling for a similar scam.

    If you've given your SIN number to a scammer, contact Service Canada to help prevent your identity being stolen. Additionally, you should contact both credit bureaus to freeze your credit report, which will block any attempts to make large purchases with your card(s) that require a credit check. This can be useful if a scammer has obtained your credit card information.

    Check out oursGuide to how payday loan scams workto learn more about protecting yourself from loan fraud.

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