A short term loan, also referred to as a payday loan, is a convenient option when you need money quickly. With thousands of lenders across the country, it’s simple and fast to find a lender that is willing to lend money even to those with poor credit. However, even though most provinces regulate payday loans, there are still many disreputable and untrustworthy lenders in operation.
Security plays a particularly important role if you’re considering applying for a short term loan online, because you’ll need to provide your financial and ID documents over the Internet. If you take care and do your research, there are plenty of secure short term loans available. Our guide shows you what features to look for to find a safe and secure short term loan.
⚠️ 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.
A secure short term loan is one where the loan provider keeps your information safe and confidential, and adheres to any applicable rules and regulations.
In terms of features, secure short term loans are the same as other short term loans. Some parts of the country have regulations that restrict how much you can borrow and what fees and interest lenders can charge. Additionally, some jurisdictions limit loan terms as well as how many loans you can take out at one time.
It’s important to note that payday loans are not regulated in all provinces or territories. See below for more information on these regulations across Canada.
Secure short-term loans you can apply for
The features that come with secure short term loans
Compare the following features when looking for a secure short term loan:
Secure online application. Lenders who provide secure online short term loans make use of the latest encryption technology to ensure that the personal and financial information you provide remains safe. They use bank level security and won’t share your information with any third parties.
Abides by the local laws. A lender should abide by any existing laws or regulations. Some provinces limit the maximum amount of interest that can be charged per $100 borrowed, while others additionally limit loan terms and how many loans you can take out at one time.
Quick access to funds. The time it takes for you to receive your loan will typically depend on whether you apply for the loan online or in person at a store. If you apply online, you will usually receive access to your money by the next business day. Applying in store can usually allow you to get access to your funds much faster, sometimes within the same day.
Use your funds for any purpose. You can use your loan for any purpose, as long as it is legitimate. Whether you need to pay for car repairs, bills, rent, groceries or a vacation, you can use your loan to cover it.
What you should look for to find a safe loan
There are many different lenders and loans available in Canada. Here’s how to find a safe option no matter what kind of financing you’re looking for:
Payday loans. A payday loan is usually paid back in one lump-sum, typically when you receive your next paycheque, whether that is weekly, bi-weekly or monthly. Research a lender online before applying for a loan and read real customer reviews of the lender. Additionally, make sure they have contact information on their website and that they abide by any provincial regulations. If you want to take it a step further, you can contact the Better Business Bureau (BBB) to see if the lender is listed as reputable and trustworthy.
Installment loans. These loans require you to make repayments in installments across a specified time period, which can be anywhere from a few months to a year or more. Ensuring that you’re dealing with a reliable lender when getting an installment loan is crucial. To check the reputation of the lender, you can follow the same process as detailed above for short term lenders.
Auto title loans. If you have a car, RV, motorbike or a boat, you can apply for an auto title loan. With this type of loan, you can use your vehicle as collateral to secure the loan, which means if you don’t repay the loan, you lose your vehicle. Make sure you deal with a trusted lender who will not try to take your vehicle away without giving you the opportunity to repay the loan. You can check if the lender is trusted by looking for independent reviews online by real customers.
Online cash advance loans. These are the same as short term loans. Make sure the lender uses the latest data encryption for your financial and personal information, and doesn’t share your information with any third parties.
Storefront short term loans. Since you are not using the Internet, you can expect a safer transaction when you get a loan at a physical location. This is because you don’t have to worry about your information making it into the wrong hands if it’s intercepted online by hackers, malware and/or scammers. Even though the lender has a physical location, you should still make sure that they operate legally. Additionally, you can read reviews online about the lenders branch.
Is applying online for a short term loan safe?
Safe short term loans are easy to find in the online world, you just have to spend some time sifting through the good and bad. Most of the leading short term lenders make use of 128-bit secure socket layer (SSL) encryption technology to keep the transfer of information secure.
When you’re considering online short term lenders, stick to ones who provide phone numbers and a mailing address in a visible location on their website, and make sure they are easy to contact. Any lender who doesn’t reply within a timely manner or who doesn’t provide much contact information should raise red flags.
The short term industry is home to some disreputable lenders, which means it’s important that you compare your options and apply with lenders that you have determined are reputable and trustworthy.
Are payday loans available in my province or territory?
Payday loans are available in all provinces and territories across Canada. You should be aware that 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.
At the time of writing in January 2019, 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 secure short term loans
You should have a savings or chequings account that accepts EFT debit and credit transactions. You’ll have to provide your bank’s name, its transit number and your account number.
It ultimately depends on the business you choose to deal with, but keep in mind that a loan-matching service has your permission to pass your information on to other lenders.
Yes. You will need to be 18 years of age, or the age of majority in your province or territory, as well as be a Canadian citizen or permanent resident with a valid Canadian address. Additionally, you will need to have some sort of income to prove that you can make your repayments and you will need a working bank account if you apply for a loan online.
Aliyyah Camp is a publisher helping folks compare personal, student, car and business loans. Prior to joining Finder, she ran her own personal finance blog and wrote for numerous finance sites. Aliyyah earned a BA in communication from the University of Pennsylvania. She likes to go to the movies and go for runs outdoors.
How likely would you be to recommend finder to a friend or colleague?
Very UnlikelyExtremely Likely
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.