Tips on Canada Payday Loans

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Canada payday loans are easy to apply for, but prospective borrowers should also take some precautionary measures when applying for a payday loan.

The main thing that applicants should check on when looking for a payday lending agency is the agency's lending  license. For example, in BC Consumer Protection BC is a non-profit organization that was established to maximize consumer protection by encouraging fair trade practices. The company regulates a variety of businesses, including payday lending operations. Lending institutions in British Columbia that are accredited by Consumer Protection BC have to strictly follow rules and regulations concerning the interest rates they can charge their borrowers. They are also not allowed to harrass their clients in the process of collecting from them.

Applicants must also make sure that the loan they are applying for is really a payday loan. For those who are not familiar with Canada payday loans, these are short-term, unsecured loans, which are usually payable on the borrower's next payday. The payment is debited from the borrower's paycheque; hence, the term "payday loan." The maximum borrowing limit for this type of loan is $1,500 and they are payable for a term not exceeding 60 days. Unlike regular loans which charge monthly or annual interest rates, the interest rates for payday loans usually vary and are computed for every amount borrowed. For example, in British Columbia, the maximum borrowing fee is 23% for every $100 applied for and in Ontario the rate is 21%.

Another thing that applicants should look out for is the requirements for the loan. Since payday loans are unsecured loans, lenders are not supposed to require borrowers to put in a collateral for the loan. A collateral is what a creditor gets from the debtor should he fail to pay for the loan on time. In the case of personal loans, the collateral may be any of the borrower's possessions, so long as they are capable of confiscation, such as a car or pieces of jewelry. If a payday creditor asks the debtor to surrender a collateral for the loan, the debtor must report it to the proper authorities right away, as it could be a scam.

It also helps to ask around for interest rates. Some lenders charge lower interest rates, while others charge the maximum fee of 23%. It really depends on how much the borrower can afford to pay back and how urgently he or she needs the money. The Consumer Protection BC requires payday lenders to inform prospective applicants about their lending rates by posting them outside their office. People should be wary of payday lending companies that do not openly advertise their lending rates because they could charge more than the maximum allowed by law.

As with any other loan, borrowers must always pay their loan on time. This will allow them to re-loan in the future and it will also help them avoid extra charges. Borrowers have to remember that, while lending companies cannot charge interest rates higher than the ceiling rates set by legislators, creditors are allowed to charge a penalty for late payment. So, for problem-free Canada payday loans, borrowers must be responsible enough to settle their dues on time. Do you live in Canada and want quick cash? You don't have time to search all over Canada for the best payday loans so visit our website now.

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