At one point in your life, you might need to get loans to bridge your funding gaps even for the short-term period. If that’s the case, then payday loans will be a good option for you since it offers a convenient way to get a loan for a short period of time.
Here’s a guide on some tips and tricks that you should know before you get payday loans in Canada or wherever you’re from.
What Is A Payday Loan?
Before anything else, you need to know what a payday loan is. A payday loan, also known as a cash advance loan, is kind of loan that has a short tenor with a high interest rate, depending on the income and credit profile of a borrower. Usually, the principal payments for the payday loan will be taken from the borrower’s next paycheck. The typical tenor for a payday loan is usually just 30 to 60 days.
It’s very convenient to apply for, but, in exchange, payday loan lenders will charge higher interest rates.
How Do You Get One?
Now that you know what a payday loan is, here are some tips on how you can get one:
Prepare Documentary Requirements
One of the basic requirements when applying for a payday loan is the documents that come with it. The usual documentary requirements of a payday loan are frankly simpler as compared to regular loans from banks.
All you need are the following: a valid government ID, an active bank account, and proof of income, such as a payslip. Once you have them, you can move on to the first step, which is applying for payday loans in Canada.
Meet the Basic Criteria
Take note that an active bank account and consistent income doesn’t guarantee approval for a payday loan. There are still some basic criteria that you need to meet before you get approved for one. If you don’t have these yet, then start taking the necessary steps to meet the requirements and criteria set out by the lender.
Typically, these are the criteria that you should meet:
To ensure your capacity to pay, your monthly income should be equal to or more than the payday loan that you’ll be availing.
You’re of legal age–at least 18 years old.
You have no reports on bouncing checks.
You don’t have unstable bank accounts.
The criteria enumerated above are just some of the usual ones that payday loan lenders ask for. However, the criteria differ among lenders. That’s why you need to check out the website or ask the lender for their criteria. See if you can meet those first before you start applying so that you can get higher chances of approval.
Ensure Good Credit Score and Credit Standing
Even if you aren’t applying for a payday loan, it’s always a good practice to maintain satisfactory credit standing and history. As preparation for getting a payday loan, however, make sure that you maintain good credit scores.
When you apply for a payday loan, one of the things that lenders will do is to perform a background check on you. This background check will include your credit scores.
If you have a bad credit score, the payday loan lenders have every reason to reject your application in fear of non-repayment. To avoid this from happening, you should start working on your credit score by making timely payments on your other loans or even your credit cards.
Do Your Research and Due Diligence
Another tip when applying for payday loans is to do your own research and adequate due diligence on the payday loan lender. There are many payday loan providers out there, and some of them might not be as legitimate as they seem. So, you also need to do your own research by checking their websites and online reviews about them.
In addition to that, payday loan providers usually charge different rates. So, it’s also up to you to shop around for lenders and check their rates and terms. Doing so will help you make a more informed decision on the payday loan that you’ll be getting. It’ll also help you avoid making the mistake of availing a loan from a payday loan lender that’s not reputable.
Seek Lenders Within Your Country
It’s true that there are payday loan companies that can lend to you overseas, wherein you can just apply online. However, this will be more inconvenient for you.
If you live in Canada, it’s best that you get a payday loan based in your country. This will speed up the process of getting a payday loan approved. Moreover, in the case that there are complications, the lender can assist you easily since both of you are based in Canada.
Read the Contract First Before Signing
Before you sign your loan contracts, it’s very crucial and important that you read it carefully first. The details of the terms and conditions you’re agreeing to are all written on the payday loan contract, which includes the fees, interest rates, and repayment schedule, just to name a few.
Since you need to abide by these terms, read all of them carefully before affixing your signature. Remember that once you sign the loan contract, you’ll be legally bonded to it. If you see anything that shouldn’t be there, you need to bring it up with your lender. In any case you don’t agree with some terms, you’re under no legal obligation to sign the contract.
Handling your finances can be tricky at times, so it’s not a surprise if you hit a wall. If this happens, a payday loan can fund that gap in your finances and get you back on track.
Using the tips above, you’ll be able to get a payday loan without having to exert too much effort or waste time. For faster approval, make sure that you have good credit history and all your valid government IDs updated as this will make it easier for you to get payday loans.