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No refusal payday loans in Canada
Are no refusal payday loans legit? We show you how to avoid scams and find a reputable payday lender.
Some payday lenders advertise “no refusal payday loans” in Canada, but consumers should take caution with these types of offers. There is no such thing as a guaranteed or no refusal payday loan. While payday lenders accept poor credit scores, you’ll still need to prove you meet basic eligibility requirements.
What should I know about no refusal payday loans in Canada?
Borrowers should tread carefully with any payday lender that promises a no refusal payday loan. These no refusal payday loans may be a scam, predatory or false advertising.
Ultimately, there is always a chance of getting refused when you apply for any kind of loan. Payday lenders in particular should evaluate your income before approving you for funding. If a lender doesn’t verify your information or doesn’t attempt to evaluate if you can afford the loan, the lender may not be legitimate.
⚠️ 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.
Compare payday loans in Canada
The lenders below do not guarantee approval, but they have more flexible eligibility requirements than traditional loans.
Maximum borrowing costs per provinceAlways refer to your contract for exact repayment amounts and costs as they may vary from our results.
|Province||Maximum allowable cost of borrowing|
|Alberta, British Columbia, New Brunswick, Ontario & Prince Edward Island||$15 per $100 borrowed|
|Manitoba & Saskatchewan||$17 per $100 borrowed|
|Nova Scotia||$19 per $100 borrowed|
|Newfoundland and Labrador||$21 per $100 borrowed|
|Northwest Territories, Nunavut & the Yukon||$60 per $100 borrowed|
|Quebec||Limit of 35% annual interest rate (AIR)|
How to spot an illegitimate lender of no refusal payday loans
Pay attention to these red flags before proceeding with payday lenders offering no refusal payday loans:
No refusal or guaranteed payday loans
While payday loans are easier to get compared to other loans, legitimate lenders cannot guarantee a loan without assessing your application.
Asking for money upfront
Watch out for any lenders that ask for payment upfront. Legitimate payday lenders do not charge fees before you’re approved for a loan. Any one-time fees for establishing the loan should only be charged after you’re approved and you have received your funds.
No payday lender licence
Under provincial Payday Loans Acts, payday lending businesses must obtain valid payday loan licences. When comparing lenders, you may notice that most lenders prominently display their licences on their website and before you proceed with an application. If they don’t, they may not be a legitimate payday lender.
Not following provincial payday lending regulations
From how much you can borrow to how long you have to repay your loan, each province has different payday lending laws lenders must abide by. For example, Alberta has a minimum loan term of 42 days, while the other provinces do not have this rule.
No transparency with APRs and fees
Payday loans are one of the most expensive ways to borrow money, and lenders must follow regulations for how to disclose APRs. Steer clear of payday lenders that aren’t clearly stating the APRs, borrowing fees and total repayment amount.
No reviews or company information online
Negative information (or even the lack of information) online can point to a payday loan scam. Always check for contact information, head office locations, social media presence, accreditations and reviews from Google, Trustpilot and the Better Business Bureau.
Features of payday loans
Payday loans are one of the most convenient ways to get your hands on cash when you’re in a financial pinch. Here are their key features:
- Caps on how much you can borrow. Payday loans cap at $1,500, so if you need more cash, this may not be your best option. Consumers in some provinces also can’t borrow more than 30% or 50% of their net income.
- Short repayment terms. Payday loans are known for being costly because of their quick repayment schedule. Typically, terms max out at 62 days for payday loans, but most lenders expect you to repay your loan by your next payday.
- Incredibly steep interest rates. Payday lenders can charge anywhere from $15 to $25 per $100 borrowed, depending on the province or territory you live in. That’s an annual percentage rate (APR) of 400% or more, making payday loans an incredibly expensive financing option.
- Fast turnaround time. A major selling point with payday loans is how quickly you can gain access to your funding. You can get your money immediately after approval if you apply in-store, and most online lenders can e-transfer your payday loan to your bank account usually within a few minutes.
What to consider before taking out a payday loan
Payday loans are one of the most costly ways to borrow money with repayment terms that offer little wiggle room. With this in mind, ask yourself these key questions before signing up for a payday loan:
What do I need this cash for?
Some people take out a payday loan to take care of a one-time financial emergency while others use them to pay for bills or to tie them over until their next payday. Ask yourself if you need this cash now and if there are alternatives to payday loans you can consider instead of turning to a loan with such steep interest rates.
Do I qualify for a payday loan?
Before applying for any type of financing, you must make sure you meet the requirements, including criteria such as your age, monthly income, existing debts and residency.
Will I be able to repay this loan on time?
Most payday lenders expect you to repay your loan by your next payday. Do the math and make sure you have a concrete plan on how you’ll repay this loan by your next paycheque without going into the red again. You may find taking out a payday loan will trigger a cycle of debt that’s hard to get out of.
Is this lender legitimate?
Because payday lenders know borrowers are grappling with financial problems and bad credit, there is a chance they may take advantage of your circumstances. Make sure you’re working with a reputable lender that’s fully licensed, follows your province’s regulations and evaluates your ability to repay the loan.
Watch out for predatory lending
The payday loan space is notorious for predatory lending. Predatory lenders may try to impose unfair fees and loan terms, or they may falsely advertise to lure borrowers in without divulging the fine print. Ultimately, they’re counting on the borrower taking on a loan they’ll default on so the lender can charge more fees.
Make sure you’re working with a legitimate lender that discloses its payday licence in the province it’s operating in and is transparent about the loan’s fees, terms and conditions. A reputable lender will also do its due diligence to check that you can responsibly repay the loan and will not guarantee approval.
Alternatives to no refusal payday loans in Canada
While borrowers should avoid any lenders promising no refusal financing, you still have plenty of options to choose from for getting the funding you need. They include the following:
- Legitimate payday lenders. Whether you prefer applying online or at a physical storefront, there are licensed payday lenders across Canada that abide by provincial regulations. Some even offer “instant” payday loans, which refers to how long it takes to get approved. In this case, they’re still verifying your income and identity before approving you for financing.
- Bad credit personal loans. Those with a credit score below 560 can apply for and receive a bad credit loan they will pay back in installments over time. This is a decent payday loan alternative due to its lower APRs and longer terms.
- Lines of credit. With a line of credit, you can borrow up to a limit and pay interest on the amount you borrow. This is a decent payday loan alternative because of its open term – you can keep the account and only withdraw and repay what you need.
- Installment loans. An installment loan is a type of personal loan offered by online lenders with lower APRs and longer repayment terms than payday loans. Instead of making one lump-sum payment, you will make repayments in installments over a set period of time.
- Debt consolidation. Consolidating your debt reduces the confusion of having multiple payments and may even offer a lower monthly payment while you eliminate your debt. You could save on interest and pay off your debt faster.
If a lender is promising a no refusal payday loan, take caution. This is because reputable lenders must check on your financial situation, such as your income and credit history, before approving you for any type of financing. Lenders promoting no refusal or guaranteed financing may be preying on borrowers with a bad credit situation who are trying to avoid the conventional application process.
Payday loans on a whole should be used as a last resort option if you’re in a financial emergency. Try to consider your payday loan alternatives, which will often come with better terms and more manageable payment options.
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