Direct short term loan lenders
Direct payday loans are option for borrowers with bad credit who need funds fast.
Updated . What changed?
If you’re in need of some cash but have a poor credit score, you may be able to get a direct short term loan. Also known as a payday loan, these loans are handy when a traditional lender, like a bank, will not give you a loan because you have a bad credit history. There are loan-matching services available that can connect you with multiple lenders, but if you’re in a hurry to get some money, it might be easier for you to go directly through the lender rather than through a matching service.
What's in this guide?
- What is a direct payday lender?
- Direct payday loan lenders
- How does a direct short-term loan work?
- What to look for in a direct payday loan lender
- Benefits and drawbacks of a direct short-term lender
- Is there anything to avoid?
- Should I borrow from a direct payday loan lender?
- Eligibility and how to apply
- Frequently asked questions
What is a direct payday lender?
A direct payday lender, or short-term loan provider, is a lender that directly provides small-dollar loans, rather than working with an outside company. This means that your information stays in one place, but you won’t get a chance to shop around and compare your options.
These direct payday loan lenders offers small-dollar loans that are typically due between 14 and 30 days, typically for a flat fee of around $15-$35 for ever $100 borrowed depending on provincial regulations.
⚠️ Warning: Be cautious with payday loans
Payday loans are expensive. If you're experiencing financial hardship and would like to speak to someone for free financial counselling, you can call Credit Counselling Canada from 8:00am to 5:00pm Monday to Friday at +1 866-398-5999.
Consider these alternatives before applying for a payday loan:
- Contact your creditors. Speak with creditors or your electricity, gas, phone or water providers about extending payment due dates or working out a new payment plan.
- Consider a personal loan. A personal loan usually comes with much lower interest rates than a payday loan.
- Pay with credit card. While not a long term solution, paying with credit card can help cover emergency expenses. You’ll need to pay off the balance before it accrues interest.
Direct payday loan lenders
Check the websites of any lenders you’re interested in to confirm they operate in your province or territory of residence.
How does a direct short-term loan work?
Depending on the lender you select, you can apply online or in-store, and the application should only take a few minutes to complete. Most lenders process applications quickly and let you know if you’ve been approved soon after. Once you sign the contract, you typically have to repay the loan along with all applicable fees by your next payday.
Online applicants can get their money transferred electronically into their bank account, and in-store applicants can collect their approved funds in person shortly after approval.
Keep in mind that payday loan regulations are not the same in every province. Some aspects that can vary include the maximum amount you can borrow, the term and whether or not you can extend your loan.
What to look for in a direct payday loan lender
Not all direct short-term loan lenders are the same. Pay attention to these points while comparing lenders:
- How easy is the process? Online direct short-term lenders are an easy way to apply for a payday loan, but not all online applications are equally user-friendly. Some lenders might ask you to fax certain documents to verify your credentials, and the overall time these lenders take to review applications, approve your loan and disburse your funds varies significantly.
- Does the lender conduct credit checks? While many short-term lenders don’t carry out credit checks using the big two credit bureaus, a large number still end up turning to Teletrack. If you’re looking for direct short-term lenders who don’t use Teletrack, you’ll have to limit your search to lenders who clearly advertise “no Teletrack payday loans.”
- What fees will you pay? The amount you borrow and the province or territory you live in affect how much you pay in terms of fees, but that does not mean all direct short-term lenders charge the same fees for a given amount. Check what fees and charges come with the loan before you apply.
Benefits and drawbacks of a direct short-term lender
- With you from start to finish. When you work with a direct lender, you deal with a single institution throughout the process — from applying to the disbursement of funds and repaying the loan. This can make borrowing much simpler.
- Information is secure. Loan connection services can pass your personal information to various third parties, and there’s no telling how many marketing calls might follow.
- Miss no opportunity. While a number of loan connection services boast extensive lender networks, they might still manage to miss a few good ones. When you’re on your own, you can take the time to look for ones based on your specific needs. You don’t have to worry about missing out.
- Spend more time looking. If you limit your search to direct short-term lenders and refrain from using a loan connection service, you may end up spending more time to find the right loan.
- Disreputable lenders. In the online lending space there is always a chance of finding a disreputable lender. Make sure you check the reputation of the lender before you apply.
- Costs and terms. A drawback of any short-term loan is the cost: You’ll likely pay a high APR that can range from about 28% to 1000% or higher. You also won’t have much time to repay your loan, with most loans due on your next payday.
Is there anything to avoid?
- Avoid taking out more than you can afford. Even if you’re looking for direct short-term lenders because you have an immediate financial need, keep in mind you’ll have to be able to repay the loan. If you’re not sure about your ability to repay on time, you may want to avoid taking the loan out in the first place.
- Avoid late payments. When you make late payments, lenders will charge late fees. And if there’s no money in your bank account on the due date, you could end up paying nonsufficient funds fees, too. Banks and credit unions charge these fees to cover the costs of a bounced cheque when there aren’t enough funds in your account to cover the repayment.
- Avoid refinancing. Refinancing the loan adds additional costs in the form of charges and fees. You’ll have to repay the original loan amount, the fees accrued from the first loan period and the fees from the second as well.
- Avoid settling. Given that there are dozens of direct short-term lenders in Canada, it’s best that you compare a few before making any kind of a decision. See what options you have available and find the right lender for your borrowing needs.
Should I borrow from a direct payday loan lender?
You might want to use a direct short-term lender in the following situations:
- You need money today. When you don’t have time to shop around, working with a direct lender that you trust could get you the money in the easiest way possible.
- You want to avoid broker fees. While there are some connection sites that can help you find a short-term loan for free, brokers can charge fees that make an already-expensive product even more costly.
- You want to avoid lender calls. One of the main drawbacks of working with a broker or connection service is that you might receive calls from lenders, well after you’ve taken out your loan.
- You don’t have a bank account. It can be hard to filter for lenders that don’t require a bank account through connection services or brokers — you might have to do that research yourself.
Eligibility and how to apply
Applications can easily be completed and submitted online. In order to secure a loan, you will typically need to meet the following requirements:
- Be a Canadian citizen or permanent resident
- Meet the age requirements (usually 18 years of age, or the age of majority in your province or territory)
- Have proof of a steady income
If all of the requirements are met, there are just a few steps to apply:
- Provide your name, date of birth, address and email address
- Provide the necessary ID, like a copy of your passport or driver’s licence, if applying online
- Give details about your employment status and income