There are situations where you find yourself needing to raise money on an urgent basis to resolve your financial crisis, this is where payday loans come to help. A payday loan is a small loan amount of up to $2000 offered to people that meet certain basic criteria for a short period of time. These are known by different names, such as short term loans, emergency loans and so on. The vast majority of companies offer quick payday loans which means you can have money instantly transferred into your bank account soon after your application is approved.
Why Payday Loans?
There are many reasons people find the need to apply for payday loans. However, they are only suitable for emergencies because of the relatively high interest rates associated with them. People go for payday loans to pay for their medical bills, have emergency repair work done, pay for essentials, pay credit card fees. This is to avoid defaults which could incur penalty fees as well as damage credit ratings. This is also to prevent direct debit penalties and so on. People are also increasingly finding it necessary to apply for payday loans while traveling abroad. Specifically, when they suddenly run short of cash.
Unlike personal loans from banks or other financial institutions, payday loans do not have too many eligibility criteria. In the majority of cases, lenders do not even perform credit checks on applicants. This makes these loan types the best option to raise instant cash. What is important for lenders is some form of an evidence to confirm the applicant’s ability to repay the borrowed money on time. This is why all applicants need to provide proof of employment that brings in a regular monthly or weekly income. This income should ideally me going directly into the applicant’s bank account. The lender’s require a direct debit agreement to enable them to debit the applicant’s account on an agreed date. This date is usually the applicant’s pay day. Apart from proof of employment and income, the applicant also has to be an adult.
How Long Can You Borrow?
Payday loans are usually available for a short time period of up to 4 weeks though it is possible to extend it for a surcharge. However, the quicker you repay, the cheaper it gets. People can borrow for as little as one day or for the full period of time depending upon their requirements. For example, a person traveling abroad may take out a payday loan for 4 weeks. Whereas someone who just needs to honour his direct debit may simply need to have money in his bank account for a day or two. Only before his salary arrives. The average time period for which people apply for pay day loans is however 2 weeks. The vast majority of people often run short of money half way through the month before their next salary due.
Quick payday loans in Canada are a perfect choice to help you solve your urgent financial problems but they should only be taken out when no other option seems to be viable. They should also be taken out for as short a time period as possible to avoid getting into further problems by failing to repay on time.