Financial management can be complex. Many of us are living paycheque to paycheque, struggling just to pay our bills. When this happens, we sometimes need to turn to alternative measures to help us get by. In such a case, a lot of people turn to Payday Loans.
These short-term loans have been around for many years, but more recently, the additional option of e-transfer loans has become available. But what are these loans, and are they safe in Canada?
Let’s take a closer look at E-Transfer Payday Loans.
What are Payday Loans?
Payday loans are short-term loans that institutions provide to individuals who require immediate financial help. These loans are often given to help people pay bills, buy groceries, or afford other everyday necessities. They are meant to cover any financial shortfall until your next paycheck.
Many people like the ease of obtaining a Payday Loan. They are quick, easy, and don’t require much hassle. With that being said, they are only meant for the short term.
Most institutions will allow you to borrow up to $1500, but it is expected to be paid back from your next paycheck. Interest rates with these types of loans are incredibly high, and if not paid back immediately, you can get into deep debt. If you cannot pay your loan on time, more interest and fees will incur.
What are E-Transfer Payday Loans?
E-transfer Payday loans make obtaining a loan even more accessible. They are provided by the same private institutions as Payday Loans but are available online.
E-transfer loans are even more accessible than regular Payday Loans because you can obtain them directly from home. Just fill out the application online, send it in, and wait for the lender to send you an e-transfer.
E-Transfer Payday Loans work in the same way that regular loans do. Borrowers can borrow up to $1500 (in most cases) and are expected to pay the money back within a short time frame.
In most provinces, you have up to 62 days to pay back a Payday E-transfer loan, but paying it back with your next paycheck is ideal.
Who can get an E-Transfer Payday Loan?
While all lenders are different in their expectations, most lenders will require you to prove that you have a regular income before allowing you to take out a Payday Loan. They will also require you to provide your banking information, as well as your home address.
Most lenders will also require you to fill out a form for pre-authorized payment from your bank account when the loan amount is due. Alternatively, most lenders will also allow you to fill out a post-dated cheque.
All of these things will be included in the application form. You can find these forms online on the lender’s website.
Pros and Cons of E-Transfer Payday Loans – Are they safe?
Pros.
The biggest pro of e-transfer loans is their ease. As long as you have a bank account and a secure paycheck, it’s unlikely that you’ll be turned down for a loan. This is a very attractive option for individuals who might have trouble receiving a loan from other institutions like banks.
They are also very quick. While many loan types take days or even weeks to obtain, Payday Transfer loans are obtained on the same day that the application is sent in. In many cases, applications are accepted within minutes.
Additionally, most Payday Loan institutions don’t check your credit before allowing you to take out a loan. For many people, this is a huge advantage.
Cons.
The biggest downfall of Payday Loans is that they are expensive. In comparison to other loan types, interest rates are incredibly high. In Canada, interest rates can be upwards of 500 or 600 percent!
If you fail to pay back your loans, it doesn’t take long for extreme debt to occur, and it isn’t difficult to become wrapped up in a debt cycle.
For this reason, you must be 100% sure that you will be able to pay back your loan on time.
Furthermore, Payday Loans don’t help you build credit. When you obtain other types of loans, each time you make a payment, that payment is reflected on your credit. But Payday Loans don’t check your credit – and they don’t help build it either.
What happens if I don’t pay back my loan?
Depending on who you borrow from, consequences for not repaying your loans can differ. Not only will high-interest rates incur, but lenders can also harass your friends, family, and even your employer for repayment.
And while Payday Loans have no positive effect on your credit report when you pay them back, they could negatively impact if you don’t pay them back. If a lender chooses to send your case to a collection agency, this will inevitably reflect your credit report.
Lenders can also sue you, take you to court, and even seize your property with failure to pay back your loans.
Where can I obtain an E-transfer Payday Loan?
We DO NOT advise taking a payday loan. However, if you are confident that you can pay back a loan in time, you can find an E-transfer Payday Loan on various lending websites.
