How Do Short-Term Loans Work?
Short-term loans, also known as payday loans, are a type of unsecured personal loan that is usually paid back over a period of two weeks (14 days). The loan is not secured by collateral, which means that you don’t have to put up anything of value as security for the loan. This makes it easy for people who are struggling to get a traditional bank loan. They can simply walk into a local store or fill out a short online application form, and get approved for a small amount of money in just minutes.
What are the Pros and Cons of Payday Loans?
Before you decide to apply for a payday loan, it’s important to know what you’re getting yourself into. A short term loan is a fast way to get money, but it comes with a lot of risks. Below is a quick overview of the pros and cons of using short term loans.
Pros
- Easy to Get Approved – The majority of payday loan applications are approved quickly. The average time it takes to get approved in less than an hour.
- No Collateral – No collateral is required to get a payday loan. This means that you don’t have to put up any property or assets as security for the loan.
- Instant Cash – Payday loan providers use electronic bank transfers, which means that your money will be available in your bank account within minutes.
Cons
- High-Interest Rate – Payday loans are expensive. Most of them carry an APR of 400% or higher.
- Loan Amount Limit – Most payday loan providers have a limit on how much money you can borrow. Most companies cap the amount at $3,000.
- Hidden Fees – Payday loans come with high fees. Typically, there are fees for every day the loan is not repaid, and there are also fees for late payments.
In order to make sure that you’re making the best choice for your needs, we recommend that you compare several different lenders before deciding on one. Make sure to compare interest rates, fees, and repayment terms before signing on the dotted line.
How to Qualify for Short Term Loans?
Requirements vary from one lender to another, but some of the most common include:
- You must be a Canadian citizen
- You must be 18 years of age or older
- You must be employed full-time for at least 3 months
- You must have an active bank account
You’ll also need to provide proof of identity/residence/employment to give assurance to the lender that you are a legitimate borrower. Short-term loans have very high approval rates, which means that you should be able to get approved without much trouble. However, you should still do your research and find out what the lender’s policy is regarding eligibility requirements.
Canadian Lending Companies That Offer Payday/Short Term Loans
If you are looking for a short-term loan, there are a number of Canadian lenders that specialize in providing this type of financial service. Some of these companies include:
My Next Pay
My Next Pay is a popular online lender in Canada that offers short-term loans and installment loans ranging from $300 to $3,000. They approve applications from people with bad credit and charge an interest rate of 18%. Their loan repayment period lasts between 14 days to 6 months.
310 Loans
310 Loans is another online lender that offers payday loans for bad credit in Canada. They offer loans ranging from $300 to $1,500. They have a 14-day repayment period and charge differently depending on your location.
Alberta, British Columbia, New Brunswick, Ontario, Prince Edward Island: 391.07%
Northwest Territories, Nunavut, Yukon: 651.79%
Newfoundland and Labrador: 547.5%
Nova Scotia: 495.36%
Saskatchewan: 443.21%
Cash 4 You
Cash 4 You offer payday loans regardless of your credit score. They offer loans of up to $1,500 and have a payday loan repayment period of 14 days. They charge $15 for every $100 borrowed (APR – 391.07%).
Conclusion
While payday loans are certainly convenient, they can be costly and should only be used as a last resort. Make sure that you weigh the pros and cons of taking out a payday loan before making a decision. If you decide to avail a payday loan, make sure that you know exactly what you’re getting into and that you understand the terms and conditions of the agreement.
Aunt Piggyy
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