Payday loans in Canada help people cover their expenses until the next payday. It is a short-term solution and is typically taken in case of a financial emergency. You can receive the funds through the Interac e-Transfer.
Payday loans in Canada are legal and are regulated differently in each province. However, you need to pay the most attention to the terms the lenders offer you, as there could be hidden fees and penalties. Here, you will learn about e-transfer payday loans in Canada and how to borrow wisely.
What are e-transfer payday loans?
E-transfer payday loans represent a brand of short-term borrowing that can be suitable for people that want to obtain money quickly. The purposes of such kinds of online payday loans vary considerably: some borrowers use the funds to cover unexpected expenses, while others use the cash to invest in something.
This class of high-cost loans is very convenient because the money is usually delivered straight to your account after a couple of minutes of you filling out the application form and being approved. You don't have to meet special requirements and don't have to provide a certain set of documents to conclude the loan application process.
The biggest distinction to make between these payday loans and the electronic funds transfer, EFT (sometimes called direct deposit) is that the latter is much slower. In some cases, it only takes a few minutes for the funds to be delivered to your banking account.
Pros and cons of e-transfer payday loans
The list of the biggest advantages of e-transfer loans includes:
Ease. The approval process is very uncomplicated - the only requirements are having a bank account and a steady paycheck. Because of this specific advantage, e-transfer loans are a good option for people who were rejected by traditional lenders.
Quickness. You can apply online and get the funds on the same or the next business day. Instant approval is a huge advantage in case you need money fast.
There are no credit checks. In contrast with traditional lenders, providers of this type of instant loans do not need to check your credit history or report.
Aside from the pros, there are some drawbacks, too. They include:
High total cost. When compared to traditional types of loans, e-transfer loans come at a higher cost. The interest rates can get as high as 400% and sometimes 500%. That would serve to quickly inflate the actual total cost of the online payday loan.
It's easy to lose control. Since this option is pricier than more traditional personal loans, it's easy to fall behind and eventually be incapable of paying back the loan in accordance with the terms. Defaulting on an e-transfer payday loan will incur severe economic repercussions in the form of harsh fees.
E-transfer loan won't affect your credit. There's no negative impact thanks to the lack of a credit check, but you also won't be able to boost your credit score by submitting payments in a timely fashion.
How to choose an e-transfer payday lender?
The current range of e-transfer lenders offers an expansive spectrum of loan options for people that seek to tap into the payday loan market and get money fast. There are a certain set of features that the majority of the providers boast.
Here are a few things that you need to take into consideration while selecting your payday lender:
How long it usually takes to fund your payday loan. The faster you receive funds, the better it is. There are payday lenders that take their time when it comes to the approval process and there are some that offer instant funding.
What are the fees? Do your homework and compare the cost of different providers. It probably won't surprise you that some payday lenders have hidden fees. They do their best to conceal such things, even if it means deceiving the consumer. Based on your location, you can end up paying anywhere from $15 to $25 for every $100 you borrowed. Skipping the little details could entail serious consequences, so be sure to conduct enough research regarding late and insufficient funds fees, and other fees that can pop up.
If it is possible to receive a payday loan approval with bad credit. Nearly every payday lender is ready to offer payday loans to clients with bad credit, but there are several exceptions as well, so you have to be vigilant while making a choice.
If it is possible to qualify for government benefits. Employment income is a must for some lenders. Sometimes, you won't be able eligible for a payday loan with government benefits as your only source of revenue.
Does the lending company adhere to the regulations of your province? Certain provinces have stringent laws concerning payday loans, so you'll have to look into that as well. For instance, Ontario residents cannot be charged with a rate of over 60%.
Does the lender have a good reputation? Chances are that if the lender has a high reputation, and it's been in the business for a long time, it's unlikely to get you into trouble just to earn more out of you.
Does the lender provide guarantees of confidentiality and security? Most online lenders adhere to the best practices and policies and are concerned about their clients' financial and personal well-being, so they go above and beyond the call of duty to ensure their customers' confidentiality and security.
You must keep in mind that not all lenders are legitimate. There are many unlicensed lending companies out there. Be extra careful and always make sure the provider of online loans received appropriate licensing and follows the laws of the province in which they're operating.
There are several potential scenarios that might occur if you accidentally end up with a bad payday loan lender. The lender might charge you illegally high fees, a case of identity theft might occur, funds can be stolen from your bank account, and many more things could go wrong.
How to apply for an e-transfer payday loan?
The entire process of applying for an e-transfer payday loan should be quick since you can apply online and gain approval in a matter of minutes.
The first step is a loan application. You need to send in your application for a payday loan. This can be done any time of the day, even outside of business hours. The next step is approval, and that's when the process might take a little longer, depending on the loan amount and the requirements of the lender. The final step is funding - when your loan application finally receives an approval, and you accept the deal, the entire loan amount is soon delivered to your bank account.
Ways to pay back e-transfer payday loan
Your e-transfer payday loan can be repaid via several payment methods. It depends on what is most convenient for you and how much money you owe. Online banking seems are the most preferred method of paying back the sum borrowed, since it's usually easier to set up automatic payments. Available payment means vary from one payday lender to the next, but most of them offer a wide-ranging list of payment channels you can use.
Repaying an e-transfer payday loan is not difficult if you choose to implement a debt repayment plan and you stick to its rules. There are also ways to reimburse your quick cash loan in a quicker fashion. You can make more payments than you originally planned. Or you can pay back the complete amount in one payment. You can also find an additional job that can help you pay back the loan as fast as possible, seek refinancing, or make bigger payments than originally planned. There are many good strategies to adopt, and it's your choice to find a successful repayment plan.
Legal regulations of e-transfer payday loans
First, it needs to be established that payday loans are fully legal in Canada. They are regulated by section 347.1 of the Criminal Code. Additional regulations are provided by local laws in general and the Payday Loans Act in particular. This type of lending has been legalized for more than a decade, with many Canadian citizens doing better financially after turning to online payday loans.
In British Columbia and several other provinces, there are rules that prevent lenders from extending your e-transfer payday loan or rolling it over. In Nova Scotia, there's a law that stops lenders from making you transfer your salary directly to them. This is just a small snapshot of how different provinces regulate payday loans in Canada.
The true cost of e-transfer payday loans
The total cost of a payday loan usually fluctuates depending on a number of factors, including the interest rate, the amount of time you take to reimburse the loan, and fees. The latter is the most important part of the equation as there can be multiple fees and penalties associated with a payday loan, namely: late fees or insufficient funds fees.
On average, clients that take out a payday loan pay $15 for every $100 they borrowed. So, for instance, if you choose to borrow $500, you will be required to pay back $575, even without any fees or penalties triggered. The fees, as mentioned before, can be related to not repaying on time or extending your loan's term. For instance, most lenders have a fixed $45 rollover fee that will surely bloat the total cost of your short-term loan.
