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Payday loan ratings methodology
Although payday loans are heavily regulated in Canada, it's still important to compare providers in order to find a reputable lender. We've done the work for you by creating a rating system.
With high ARPs, payday loans are best saved as a last resort. But we understand that sometimes they’re the only option when you need money quickly and have less-than-perfect credit. That’s why we put together an independent rating system to help you weed out predatory lenders and find a company you can trust.
Our editors objectively compare payday loans and rank them on several benefits and features to give you an overall rating of how useful each lender might be.
We rate payday loans using a system of one to five stars:
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
Since payday loans are heavily regulated in Canada, the cost, maximum amount and term of a loan in your province or territory of residence is usually always the same – no matter what lender you turn to. But it’s still worthwhile comparing lenders. Some payday lenders offer better customer service, bonus offers or perks, and have better customer reviews. So these are the types of factors we take into consideration when comparing payday loans.
8 factors we consider for our star ratings
How we rate minimum loan amount
★★★★★ — Under $100
★★★★★ — $100 to $500
★★★★★ — $500 or more
Typically, payday loans start around $100. We consider any starting amount under $100 to be the most competitive and worthy of 5 stars, since it provides the most flexibility for borrowers.
How we rate the online application
★★★★★ — Has an online application
★★★★★ — Doesn’t have an online application
If a lender has an online application, it earns 5 stars. If you can’t apply online or have to visit a branch to finish your application, it earns 1 star.
How we rate transparency
★★★★★ — Clearly provides terms of service, only provides example fee structure
★★★★★ — Doesn’t state costs online
Payday lenders are required to state their license numbers online, along with costs and fees. They must be registered and abide by all provincial or territorial laws surrounding payday loans. If a lender doesn’t state their license number and does not follow provincial/territorial laws, avoid them at all costs. How transparent or clear a lender is on their site, however, is a different matter. A lender scores 5 stars if they clearly state costs, fees, terms and provincial/territorial laws, as well as their license number. Anything less and they earn 1-2 stars in this category.
How we rate funding options
★★★★★ — Offers bank deposit, in-store pickup and other options
★★★★★ — Only offers bank deposit
★★★★★ — Only offers in-store pickup
Lenders that have storefronts typically offer both direct deposit transfers into your bank account and in-store pickup, which earns them a high 5-star rating. Lenders that only operate online typically only offer bank transfers, which earn them a slightly lower 4-star rating. And due to the limitations of needing to pick up your loan at a store only, we rate lenders that only offer this option with 2 stars.
How we rate turnaround time
★★★★★ — Less than 10 minutes
★★★★★ — 11 to 60 minutes
★★★★★ — 1 to 2 hours
★★★★★ — 2 to 24 hours
★★★★★ — Longer than 1 business day
Many lenders can eTransfer your payday loan directly into your bank account in 10 minutes or less. Because payday loans are meant to be used for emergency expenses, we rate lenders that offer less-than-10-minute turnaround with five stars.
How we rate customer service
★★★★★ — Phone number, email and live chat
★★★★★ — Phone number and email
★★★★★ — Phone number or email
★★★★★ — No contact information
While most payday lenders only have a customer service phone number and email — which earns them a solid 4 stars — those that have a live chat option on their websites earn our top rating. If a lender only provides borrowers with a phone number or email, it earns 3 stars. Those with email forms that require you to submit your contact information and wait for a response earn 2, and those that don’t provide any contact information earn a low 1-star rating – and should be avoided.
How we rate customer reviews
★★★★★ — Excellent customer reviews
★★★★★ — Good customer reviews
★★★★★ — Average customer reviews
★★★★★ — Subpar customer reviews
★★★★★ — Poor customer reviews
Customer reviews are an optional rating that we give to lenders that have been rated by at least 50 people on either Trustpilot or the Better Business Bureau (BBB). We base our customer review rating on whichever website has the highest amount of ratings.
How we rate bonus features
★★★★★ — Offers 2 perks
★★★★★ — Offers 1 perk
★★★★★ — Offers no perks
We want to give lenders that offer something extra to borrowers a chance to have that reflected in their star rating. If a lender checks off any of the following features, it earns bonus stars:
- Offers money off or cash back on your loan
- Has an app for your phone
What we don’t consider
We review every lender with these categories in mind, but they aren’t the only factors that should play a role in your decision. Payday loans are expensive, and you should carefully consider the costs and lender before signing on the dotted line. Here are a few more factors you should consider when selecting a payday loan:
- Availability. Some lenders don’t operate in all provinces and territories, meaning they might not be available to you.
- Minimum income requirement. Legit lenders will check your income to confirm that you can afford to borrow. But some lenders go one step further and have a minimum income requirement. Some provinces and territories have laws that also require this. If you don’t meet this, you won’t qualify for a loan.
- Other eligibility requirements. You will likely need an active bank account, be employed or have a regular source of income, and possibly meet other eligibility requirements to qualify. Check with your lender to see if you’re eligible before you submit a full application.
⚠️ Warning: Be cautious with payday loansPayday loans are expensive. If you're experiencing financial hardship call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). Consider alternatives instead of a payday loan:
- Local resources. Government programs and nonprofits offer free financial services and help with food, utilities and rent.
- Debt relief companies. There are services to help you reduce your debt payments.
- Payment extensions. Talk with bill providers about longer payment plans or due-date extensions.
- Side jobs. Sell unwanted items online, sign up for food delivery and more.
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