Low cost cash advance
Need some cash but don't want to pay the high interest rates? Consider getting a low cost cash advance.
While it’s generally quite simple to get approved for a cash advance, you’ll have to meet some basic criteria. Additionally, the cost of a cash advance can differ between lenders, which means you’ll need to do some research and compare your options in order to score the best deal.
Our guide explains how to compare your options in order to find the lowest cost cash advance. We cover the benefits and drawbacks of a cash advance, as well as some of the most frequently asked questions.
⚠️ Warning: be cautious with short-term loans
If you're experiencing financial hardship and would like to speak to someone for free financial counselling, you can call the Credit Counselling Canada on 1800 007 007. It is open from 8:00am to 5pm, Monday to Friday. When comparing short term loans, ensure you take into consideration any fees, charges and rates you may be charged.
Alternatives to short-term loans
Consider these alternatives before applying for a payday loan:
- Use online Government resources. The Financial Consumer Agency of Canada website demonstrates how small amount loans work – and suggests alternative options that may help you.
- Payment plans. Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan or receive an extension on your due date if you’re behind on payments.
- Contact your creditors. Speak with creditors about extending the due date of your payment, or working out a new payment plan that works for both of you. Seek personal loans elsewhere. Consider a small personal loan from a bank or a credit union. You may qualify for a loan with much lower interest rates than those offered by payday loan companies.
- Pay with credit card. Consider paying with your credit card to cover your emergency bills or payments. This is not a long term solution, as you’ll need to pay off the balance as soon as possible, but it’s an alternative to a short term loan with high – and immediate – interest rates.
Cash Money Payday Loan
- Minimum loan amount: $100
- Maximum loan amount: $1,500
- Interest Rate: Varies by Province
- Fees: Up to $17 per $100 borrowed (rounded to nearest dollar)
- Loan term: 12-14 days. Varies by Province
- Turnaround time: Within 2 hours with INTERAC e-Transfer® if approved
- Key requirements: Be 18+ years old, provide proof of recurring income
A selection of loans you can apply for
Check the websites of any providers you’re interested in to confirm they operate in your province of residence.
How does a low cost cash advance work?
As long as you meet the basic eligibility requirements set by the lender, you can generally find a low cost cash advance. While finding a low cost cash advance can be a challenge, a few factors will play a role in your success:
- Creditworthiness. Your creditworthiness plays an important role in the annual percentage rate (APR) that you will have to pay on a cash advance.
- Credit rating. If you’re looking for a low APR cash advance, it’s imperative that you have a good or excellent credit rating.
You can apply for a low cost cash advance either online or in person at a store. If you apply in person at a store, you can usually get cash within the hour once your application has been approved. Applying online usually results in almost instantaneous application approval, however the funds will usually take one business day to be transferred into your bank account. Depending on the lender you choose, you can use different methods to repay the cash advance, which you have to do on or before the scheduled due date.
If you have an existing credit card, you can consider using it for a cash advance by withdrawing money with the card through an ATM. Keep in mind that you will be charged interest from the moment you withdraw funds using your credit card. Rates are high, typically sitting between 19.99% and 36% or higher.
Features of cash advances
When you’re comparing cash advance options, consider the following features:
- Interest rate. You’ll have to pay interest no matter what kind of cash advance you take out. If you have poor or bad creditworthiness, it is going to be more difficult to find a low cost cash advance.
- Fees. As explained further down, provincial/territorial laws may dictate how much a lender can charge in fees. So, while a lender may provide low fee short term loans in one province, it may charge higher fees in another.
- Loan amount. Some lenders will only approve you for a certain amount, while others may allow you to apply for higher loan amounts. If the maximum amount provided by one lender does not meet your borrowing needs, consider a different lender.
- Making repayments. With a short term loan, you typically have to repay it by your next payday. Your lender will usually take your bank details and automatically withdraw the loan repayment on the due date. However, it may also offer other ways to make repayments such as credit cards, debit cards, cheques and cash. If you get a credit card cash advance, you can repay it over time by making at least the minimum monthly payment. However, in this case you can end up paying a large amount of money in interest. If you have other bills on your credit card, the provider is obligated to use your payment to pay off the amount that is accruing the most interest, which is usually a cash advance. With a credit card cash advance, you are in control of how much interest you pay over time, since you can pay the entire balance off as soon as possible or you can drag it out over months.
Benefits and drawbacks
- Easy application process. If you choose to apply online for a loan, you can submit your application from the comfort of your home or office, or even when you’re on the go by applying via your cell phone. Completing and submitting a typical online short term loan application takes no more than ten minutes.
- Get money quickly With a conventional loan or a new credit card, you may have to wait for days before you can get your hands on the money you need. With a short term loan, you can usually get approved almost instantly and access the funds on the same day or by the next business day.
- Apply with poor credit or low income. You can apply for a short term loan if you have poor or bad credit, as long as you have a steady source of income that proves to the lender that you can make your repayments. Some short term lenders provide cash advances for low income earners as well.
- High interest. Short term lenders usually have stringent eligibility requirements, so they tend to charge much higher interest than traditional lenders like banks and credit unions, since most of their borrowers are considered higher risk.
Things to avoid before you take out a cash advance
- Establish your ability to repay the loan before you even apply for it. If you think you won’t be able to make your repayments on time, consider whether you should avoid taking out the cash advance in the first place. Failing to make your repayments on time will cost you more in fees and can negatively affect your credit score. Not all lenders will report late payments to the credit bureaux, however some will.
- If you have a bad credit score, you will likely have to pay a higher APR than if you have a good credit score, so find out if you can afford the loan once you take this factor into account.
Payday loans are available in all provinces and territories across Canada. You should be aware that payday loans are regulated by individual provinces, meaning costs and fees can vary between. Ensure that any lender you choose abides by the laws of the place you live.
At the time of writing in June 2018, the Yukon, Nunavut and the Northwest Territories do not have legislation regulating payday loans.
Find out how much lenders can charge across Canada