Everyone nowadays is in the race to become the best and stand out at work. In this attempt, most employees get so soaked in sweat that they fall out on essential components of their work and personal life. Some companies take advantage of your passion and overburden you with work, so you need more time to focus on your rights and salary issues.
However, nowadays, the concept of paystubs is gaining popularity, which contains the components of salary, including taxes, added benefits, etc., that form your cumulative salary. But, the paystubs are also a gift from the company. Some opportunistic ones make you so busy striving to get your compensation on time that you need more energy to think or pay attention to these critical matters.
These companies make an individual dependent on payday loans to meet their monthly necessities.
What is a Payday Loan?
Payday loans in Canada are permitted under section 347.1 of the Criminal Code so long as the province of the borrower has enacted sufficient provincial legislation concerning the provisioning of payday loans. Payday does not have a fixed or dictionary definition. Still, it is usually a short-term, high-cost loan for $1500 or more, typically paid within the next 62 days in Canada. Depending on state law, payday loans may be available through storefront payday lenders or online.
Options to Consider before Applying for a Payday loan for the first time
Before applying for a payday loan, make sure you are capable enough to pay the loan on time, or else the circumstances may be worst.
If you are in an emergency and dire need of money, you may consider the following:
- Requesting for an extension in loan payment due date
- cashing during vacation days
- putting forward the request for advance payment from your office
- requesting a loan from family or friends
- apply for a loan or line of credit from your acquainted institution
- use a credit card to meet the expenses
- using overdraft protection on your chequing account
- asking your lenders for payment deferrals, including a mortgage deferral and a payment holiday on your credit card
Where can you get a payday loan?
Privately registered companies offer payday loans in stores and online. They must follow the rules of the province or territory where they do business. Payday lenders need a license to issue loans in your area or region. Make sure you are getting into an agreement with a licensed payday lender. If you are living in Canada and opting for a payday loan from outside the territory via an online loan, be aware of the scams and fraudsters.
How much a payday loan cost?
Payday loans are costly compared to other ways of borrowing money due to the high fees or interest rates; you may have to pay some charges if your cheque or pre-authorized debit doesn’t go through, and your interest n the loan may increase ( considering the old charges as interest) if you don’t pay back the loan on time.
These factors collectively raise the charges concerned with your loan making it harder to pay back, which may cause or increase financial difficulties and stress.
Before taking out a payday loan, pay it back on time. If not, your financial situation may get worse. Your debt may grow, and you may pay much money over time.
The step-by-step payday loan procedure
Applying for a payday loan
Before accepting your payday loan request, lenders may require you to do one of the following:
- Please fill out a form or agreement allowing the lender to withdraw the payment amounts, including fees, directly from your bank account when they are due. This is also called a pre-authorized debit.
- Provide a cheque dated shortly after the expected day of retuning the loan for the total amount, including fees.
Getting money from a payday lender
Primarily, the payday lender will deposit money in your bank account or give you cash. However, sometimes, the payday lender may issue you a prepaid card, also called a cash card. It may cost extra to activate and use the card.
Making sure you understand the agreement
The payday lender will ask you to sign an agreement. Each province has rules about what must be in agreement.
The agreement most commonly includes the following;
- amount borrowed
- payment schedule
- loan due date
Read your agreement carefully before signing it. Ask the payday lender about anything you don’t understand.