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Have you ever Considered a Payday Loan?

Many of us have high hopes that we can achieve income levels that will far exceed our financial demands. However, often enough after we have paid our bills, and purchased all the necessities we require, we are not left with very much in the way of income, which has left a huge market for both unreputable and reputable Canadian online payday loan lenders.

There are strategies, however that can help us save money, may our paycheques stretch a little further, as well as increase our disposable income. One method is to seek out tax credits that will help us when it comes time to file income tax forms. These credits can assist us at the end of each tax season by affecting how much income tax we have to pay versus how much we can expect to see via our tax returns. You could also opt for a much more reasonable option and learn how to get a $5000 bad credit loan from Sarah at http://www.bad-credit-loans.ca

Other options also exist to help you, not only for Canadians but there are options for bad credit Australian loans, if you find you are without the money you require for certain expenses – payday loans, being one of them. If you have ever considered a payday loan - it is important to learn more about this loan option before you move forward with the process.

What is a payday loan?

Payday loans are short-term loans that are provided for consumers who require fast cash advances to pay for a variety of expenses. These advances are given in smaller amounts with a maximum limit, typically up to $1,500. Qualification standards for these loans differ between countries, and in each Canadian province. Typically, employment and payroll records will be qualifying factors. Many payday loan companies will instantly approve cash advances and you will not have to go through a credit check.

In Canada, each province maintains their own set of criteria for payday loans. Interest rates are comparable across many of the provinces, and Saskatchewan is an example of one province that offers lower interest rates.

In Ontario, an average payday loan can look something like the following: on a loan for $300, with a payback deadline of 2 weeks, the total upfront charge would be $62.94. This amount is based on a 546.98 APR% and fixed interest rate of $20.98/$100.00 borrowed. As a result, the total amount for you to pay back would be $362.94.

Possible Reasons for Taking out a Payday Loan

There may be a variety of reasons why you would consider taking out a payday loan. If you find you need short-term financing for an emergency of any kind or a lump sum of money for a specific expense that requires immediate funding at which you do not have enough time to acquire the necessary funds, a payday loan may be a viable option.

When you apply for a payday loan, as previously mentioned, you do not have to undergo a credit check or score appraisal and you can often secure the money the same day. The overall process can be completed on average in less than 15 minutes. You can apply online on whichever payday loan site you choose to deal with and they will transfer the funds directly to your bank or your personal account. Specific details will vary between each online platform, so it is a good idea to read through all of the information on each payday loan company site before proceeding with your decision.

Considerations to Make before Taking out a Payday Loan

Having access to funds in a pinch can be very appealing however before taking out a payday loan you should consider all of the implications as well as ask some important questions to determine if this is the right course of action.

High Interest Rates and Fees

Payday loans carry higher interest fees than most other types of loans or credit options. If you are short on cash, they are a quick way to secure the necessary funds, however you should consider if the high fees will overshadow the convenience that these loans can offer.

Short-term Loans

These loans are only designed to last for a short period of time. Typically, they will tie you over until your next paycheque and then you are required to pay them back in full. The average payday loan last for 2 weeks and if you cannot pay the loan plus the interest back within the provided time frame, you will be charged additional fees which can add up. If you do not think you will have enough money to pay back the loan in time, a payday loan is perhaps not a wise choice.

Overall Debt

If you do not have the funds to pay back your loan, this can put you into further debt. These charges on top of not being able to pay your regularly monthly bills and expenses will only add your financial difficulties. Asking yourself if you will have enough money to pay the loan when it comes due as well as examining the amount of debt you already have, are important questions and considerations to make before proceeding with a payday loan.

Payday loan providers have received some criticism in relationship to their high fees and their contribution to consumer debt. This perhaps can be seen as a form of enabling or even taking advantage of individuals who are struggling financially.

With this said, as consumers we should rely on ourselves first, as well as financial professionals to help up learn how to manage our money as best as we can. Additionally, we can look to alternative solutions to increase our funds instead on relying on a payday loan.

Alternatives to Payday Loans

If you are extremely strapped for cash and do not want to take on a payday loan, here are some other possible options that you may find less expensive in the long run:

  • A less expensive credit options through a bank or credit union, such as a small loan, a line of credit, or overdraft account protection (perhaps with a longer grace period to pay back the loan)
  • A credit card cash advance (perhaps would have a lower interest rate)
  • A small loan from a family member or a friend (you can work out a payment plan and reasonable interest rate)
  • A partial pay cheque advance from your employer

Overall, while payday loans may offer a great option for short term fixes, if you should require financial assistance on a longer term basis, look to alternatives sources as well as seek out strategies that will help you save money wherever you can. You can adjust your spending habits, as well as look for ways in which you can maximize your disposable income, whether it is through avenues such as annual tax credits or other beneficial means.

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