Canada Bad Credit Loans
Canada Bad Credit Loans
Bad credit loans, also known as cash advances or payday loans, are available to Canadians with poor credit. Bad credit loans are short, unsecured loans for small amounts (up to $1,000).
Since payday loans are unsecured loans, they do not require collateral - something of value the lender can take if the loan is not repaid. This means that cash advance lenders in Canada only rely on your promise to repay a payday loan.
Bad credit lenders take a risk when they provide payday loans - because payday lenders do not make credit checks before making a loan. Since they do not check credit, payday lenders in Canada assume that all borrowers have poor credit. Remember, the lender does not have any guarantee (collateral) that you will repay the loan.
In order to make up for this risk (lack of collateral), Canadian payday lenders charge high interest rates. Bad credit payday loans are just two-week loans for small amounts (in most cases) so the actual amount of interest paid is not high. When compared with other forms of consumer credit, which use annual percentage rate, or APR, to show the percentage of interest paid over one year, payday loans are very expensive, with an APR of around 300% - or more!
Canadian Payday Loan Qualifications
- You must have an active bank account with online banking
- You must be at least 19 years old (or the age of the majority in your province or territory)
- You must be steadily employed
- You must receive regular paychecks
- You must make more than $1,000 CAD per month
- You must be a Canadian citizen or permanent resident
- You must have a working phone number
Canadian Bad Credit Loan Uses
Bad credit loans and cash advances are intended for emergencies and unexpected expenses. Lenders in Canada provide you with a small amount of cash, from $100 to $1,000, to help you when you’re in between paychecks and you need cash.
The average payday loan in Canada is around $300 - not a large amount of money. Be careful and don't overextend yourself.
Canadians use Payday Loans to:
- Pay for emergencies and essentials, such as groceries or during a period of illness
- Pay for unexpected expenses, such as car repairs
- Avoid Late Charges
Since payday loans and cash advances are so expensive (due to high interest rates), they are not recommended for unnecessary purchases. Do you really need $200 concert tickets that will cost you $30 more than usual? Save payday loans for times of absolute necessity.
Instead of using payday loans, save money to purchase larger expenses. By the time you've saved enough, you may realize that you’d rather spend your hard-earned money on something else.
Bad Credit Payday Loans and Late Charges
Bad credit loans are expensive but many Canadians can use them to escape other, more expensive fees. A payday loan can help you avoid an overdraft fee, a credit card late fee or a utilities late fee. Furthermore, a payday loan may help you bridge the gap between payments, which will improve your credit report, since it will not have a late payment on record.
Payday Loan Rollovers
Payday lenders in Canada allow you to extend the due date of your loan. This is also known as a payday loan rollover or rolling over your bad credit loan. A payday loan rollover may be convenient because it allows Canadian borrowers to postpone payment, but this convenience comes at a cost. Lenders will charge additional interest and fees when payday loan is rolled over.
These fees can make it very difficult to repay your bad credit loan.
Avoid additional high costs and overwhelming debt by only using payday loans and bad credit loans when you know you can repay the loan on time.
Canadian Bad Credit Lending Regulations
Some Canadian provinces began regulating payday loans and cash advances after federal legislation transferred responsibility to territorial governments. This means that payday lending regulations may vary from one province to the next.
Payday Lending in British Columbia
British Columbia legislation has a recommended effective annual interest rate of 60% for the first 13 weeks and 36% after that. The maximum amount payday lenders can charge is $40 for every $100 borrowed.
Payday Lending in Ontario
Ontario legislation limits the total cost of borrowing to $21 for every $100 borrowed. Certain practices, such as roll over of loans, are banned. Borrowers can also cancel payday loans within 2 days of borrowing without being penalized.
Payday Lending in Nova Scotia
Nova Scotia legislation states that payday lenders cannot charge more that $31 for every $100 borrowed. The effective annual interest rate should not exceed 60% and the default fee cannot be more than $40. Payday lenders are also prohibited from setting the due date before payday.
Payday loan offers may vary greatly, and it is best to compare loan options before making a decision. Take the time to thoroughly understand the terms and costs of payday loans before applying for one.
You can use oscarnominations2017.com to compare payday loan and bad credit loan offers from many different Canadian payday lenders.