Are you wondering as to why so many salaried individuals in Canada apply for payday loans so often? Are you thinking to avail one for you to arrange guaranteed cash? If yes, then you have dropped at the right place where you get all the necessary details of online payday loans instant approval Canada including the following:
- What exactly is the payday loan?
- How does it work?
- Real-time loan scenario to understand it better
- How financial charges are calculated under instant cash loans?
- What if you cannot repay the loan amount?
- Should you apply or not?
So, without any further adieu, let’s get started on this.
What are Payday Loans?
In somewhere down the loan, most of the Canadians are aware of the payday loan. It’s like this is a short-term cash loan with no collateral requirement and an online transfer of cash in a few hours of time after the approval.
Some people consider it as a paycheque to paycheque loan because a borrower has to repay the loan amount after receiving the next paycheque. Also, there is information among borrowers that online installment payday loan instant approval has a loan offering of $100 to $1500 with a repayment period of 2 weeks. But in reality, the repayment can be extended up to 62 days along with interest and late payment charges added.
Most people turn to payday loans when they desperately need urgent sums of cash to deal with unexpected expenditures. At first payday loans offering seems attractive but it is better to know all the ins and outs before applying for the same.
How do online payday loans work?
The working process of short-term payday loans is pretty straightforward. And, it has been divided into the following few steps:
- The first lender will ask you to fill up an online application form showcasing all your personal, income, loan amount required, citizenship, and other details.
- Once find it appropriate, and then you will get to know for how much amount of loan you are eligible for.
- Once agreed on the same terms, the lender will ask you to sign an NDA (Non-Disclose Agreement) stating the fact that you allow the lender to debit your account on the next payday to retrieve the loan amount directly.
- Also, you agree on terms of the stated interest rate charged, bear the financial charges (in case of late or no payment), and other terms and conditions.
Find an example to better understand the concept of payday loan
After reading the above terms, there might be a thought that comes to your mind. “Should I Really Apply for Payday Loans Canada?” Well, it is natural to think like this in that way. A better way is to understand the whole process of the loan by referring to our given example and getting a fair idea of the loan offer.
Here, we have an example loan situation for you.
- Suppose you urgently need the sum of $300 to repair the car, pay for emergency medical bills, need to pay the school fee for kids, or for any other reason.
- You approach a payday loan lender asking for $300 as cash and agree on the terms that you will be charged with $45 interest charges ($15 for every $100 borrowed.
- You also agree to make the payment within 2 weeks of taking the loan.
- Unfortunately, you fail to pay within 14 days of time and the lender charges you with a late payment fee and your final loan amount comes to around $400.
- So, instead of $345, you have to repay $400.
Now, you might get an idea that the terms of payday loans are transparent. It is up to you to decide how to repay it back with or without bearing extra financial charges.
Financial charges under instant payday loan
We have just referred to the financial charges of online e-transfer payday loans instant approval Canada. And, let’s talk more about it. If there is an average payday loan amount borrowed by a person is $375, then the average financial charges or interest rate you say would come around $56.25 depending on the terms.
Normally, the interest charges fall anywhere between 15% to 20% depending on the lender and it could be high as per different provincial laws in Canada. In general, the interest rate is calculated by multiplying the amount borrowed by the interest charge. For suppose, 15% of $375 would be around $56.25. So, the total you have to repay is $431.25, and that too within the fixed time period of 2 weeks.
What if you can’t repay the loan?
It is very simple to understand the fact that if a borrower fails to make the repayment within the scheduled time of 2 weeks, then there will be a rollover. It means the loan will be carried forward until to repay the same. The thing to keep in mind is bearing late payment charges as well along with the respective financial charges of the loan that we talked about it earlier.
For example, if your loan amount is $375, the interest charge is $56.25, and then the late payment fee would come around $64.69 respectively. So, after the rollup, you have to pay a total sum of $495.94 respectively. So, this is how you see paying more than extra i.e. around $500 a month while you have borrowed less. And, remember the charges keep on adding if you keep on rolling over the repayment schedule.
Should You Apply for Online Payday Loans or Not
After having all the discussions, it’s time to make the final decision, as to whether you should apply for it or not. Well, in actual terms, everything is transparent and flexible about payday loans. So, there is no need to feel confused about whether to pay high more than you expected. All you have to decide as to how to repay the loan back within the stipulated period of time. And, if there is a rollover in your mind, then get ready in advance to repay extra more than you have borrowed. Also, keep in mind the different interest charges levied by lenders in different provinces of Canada that you have to look at by yourself before applying.
Frequently Asked Questions
What is the maximum amount can be borrowed?
At max, you can get $1500 from payday loans after having all the income and personal background checks. Just make sure to get complete information on financial and late payment fees before applying for the highest level amount.
In what ways cash from payday loans be used?
It is up to you to decide how to use the loan money. There is no such restriction imposed by loan lenders on your part. You are free to spend the funds on any sort of personal expenditure.
Will there be any legal action against non-payment of the loan?
No, there is no such legal action taken against you. All you have to bear is paying the rolled-over financial charges along with the principal amount and interest charges. Worse than that would be your credit score going downside.