The concept of payday loans in Canada has been around since the early nineties. They have however come under new political scrutiny since the recent downturn in the American economy, and have even received government regulation to ensure responsible lending practices. These loans are similar to those in the United States; with different emphasis on lending practices, access to credit history and repayment strategies. Although they tend to be used by Canadians over Americans, they do have their pros and cons, which must be weighed carefully before a decision is made. Online payday loans no credit check instant approval Canada
Payday Loans And Making Them Work For You
There are many advantages to payday loans in Canada, especially when one considers the relatively lenient borrowing requirements. Most lending practices in Canada are either quick or free; there is no paperwork to deal with and no credit checks required. In the case of a quick application, one fills out an online form and receives approval in seconds. This expedites the amount of money borrowed, and it prevents the need for a credit check that would slow down an approval process. Because payday loans can be paid back on your next payday, the associated fees are usually very affordable. With a short term loan you can make the exact same payment as you would make if you were getting a regular loan from a mainstream lender; this is the main benefit to payday loans in Canada.
The main drawback of payday loans is the lack of accountability involved in the lending process. Because the lenders do not have to reveal their lending criteria, Canadians who borrow do not know exactly how much they are risking by taking out a short term loan. Payday lenders use a specific formula to calculate the risk involved in each situation, and the amounts they lend are based on these formulas. When one is borrowing money to help with a financial emergency between paychecks, this can mean a higher interest rate than one would receive had they planned ahead and planned for a longer repayment period. The other drawback is that a person who takes out a payday loan to help with a financial emergency and does not budget properly may end up defaulting on the loan which will negatively impact their credit for years to come.