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What you should know about guaranteed payday loans
A legitimate lender won't guarantee you a loan, but you can apply for a payday loan where approval is almost guaranteed.
Some lenders in the payday loan space advertise “guaranteed payday loans”. Take caution with these types of offers. There is no such thing as a guaranteed payday loan. While many lenders accept poor credit scores, they still have other eligibility criteria that you need to meet in order to be considered for a payday loan.
Why should I avoid lenders that advertise “guaranteed payday loans”?
Simply put, these loans are likely a scam, predatory or have fine print that actually doesn’t make them guaranteed.
- Scams. A person searching for guaranteed payday loans no matter what in Canada most likely has an urgent need for funds, making them a prime candidate for scammers. Watch out for lenders that ask for money up front or aren’t licensed to operate, and always be cautious of providing your personal and financial details online.
- Predatory. The payday loan space is known to be predatory. Avoid lenders that guarantee approval without examining your finances first. Lenders must make a reasonable judgment on an applicant’s ability to repay the loan. Lenders should assess factors such as income, living expenses and existing debt. They may also do a credit check. If a lender doesn’t ask you for any of this information or doesn’t attempt to evaluate if you can afford the loan, the lender probably isn’t legitimate.
- Fine print. A lender may advertise “guaranteed payday loans” to draw people in, but chances are it has some requirements you must meet. Find a lender who puts effort in transparency – that includes clearly defining its eligibility requirements and breaking down exactly how much the loan will cost you.
Are there payday loans that are almost guaranteed?
Yes, payday loans in general have lenient eligibility requirements compared to other loans. Borrowers with poor credit, no credit or previous bankruptcy can apply and get approved for a payday loan. As long as you have a steady source of income, whether that’s from employment, benefits or pension, it’s possible to get a payday loan, which makes it almost guaranteed.
Compare payday loans
The payday loans below have a few eligibility requirements.
What payday loan features should you consider?
If you’re thinking of getting a payday loan, you should keep the following features in mind:
- Loan amount. Payday loans typically have a maximum loan amount of $1,500, but how much you can personally borrow depends on your income.
- Loan term. Payday loans must be repaid by your next payday. The maximum loan term in Canada is 62 days.
- Processing time. Processing times may vary between payday lenders. Some lenders can approve applications within minutes, while others may take a few hours.
- Availability in stores and online. Some payday lenders only have online applications, some only have physical stores and some have both.
Consider the pros and cons before applying
- Apply easily. The application process for payday loans usually takes less than 10 minutes.
- Use the funds for any purpose. There are no restrictions on how you use the money from a payday loan, as long as you use the money for legitimate purposes.
- Unsecured. Payday loans are unsecured, so you don’t need to put up any collateral.
- Bad credit is OK. Your credit score has less of an impact on your application. Lenders will instead focus on your ability to repay the loan.
- Not guaranteed. There is no such thing as a guaranteed payday loan. While having a bad credit score is OK, you will still need to meet other eligibility criteria to be approved.
- Unreasonably high fees. Payday loans have annual percentages rates (APRs) in the triple digits. APR is the interest rate and fees expressed as the yearly cost of borrowing.
- Disreputable lenders. There are many scams operating in the payday loan space, so make sure you’re protecting yourself from any untrustworthy lenders. Furthermore, check to make sure the lender abides by any provincial regulations.
Is there anything else to consider before you apply?
A payday loan can help you get by in times of financial need, but if you’re not able to repay it on time, you could find yourself in a spiral of debt. Late or missed payments mean more fees, higher interest payments and a possible negative effect on your credit rating.
Review the loan contract carefully before accepting the loan to learn when your loan is due and how much the loan will end up costing you. Sometimes a loan may seem like a good offer, but the hefty fees and short turnaround time may mean you won’t be able to pay the loan back on time.
If you don’t like the terms of your loan, you aren’t obligated to sign the contract. It’s better to walk away from money and work out other ways to finance emergency costs than taking on more debt.
How to apply for a payday loan
Most lenders will want you to meet some basic eligibility criteria including:
- Be a Canadian citizen or permanent resident
- Be at least 18 years old, or the age of majority in your province or territory
- Have steady source of income
- Have a valid bank account if you’re applying online
Your application will also require the following information:
- Your name, date of birth, home address and email address
- A valid form of government ID (driver’s licence, passport, etc.)
- Details about your employment status and income
Are payday loans available in my province or territory?
Payday loans are available in all provinces and territories across Canada. Payday loans are regulated by individual provinces, which means costs and fees can vary. Ensure that any lender you choose abides by the laws of the place you live.
The Yukon, Nunavut and the Northwest Territories do not have legislation regulating payday loans at the territorial level. Payday loans are regulated in these territories at the federal level only.
Frequently asked questions about guaranteed payday loans
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