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WHY PAYDAY LOANS ARE SO POPULAR IN CANADA

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WHY PAYDAY LOANS ARE SO POPULAR IN CANADA

Have you ever noticed that, in recent years, the terms “payday loans” and “cash advance loans” seem to be on the rise? Do you ever wonder why that is? I’ve been more than curious myself and I did a little digging to find out what exactly is the appeal of these types of loans and why more and more Canadians seem to be turning to them.

PAYDAY LOANS - EXPLAINED:

Firstly, what exactly is a payday loan? As the name suggests, it is generally a very short-term loan to get you to your next pay check. It is usually for a small amount of money (less than $1500) and needs to be paid back in a quick time frame (within 62 days). Obviously, there is a bit more to cash advanced loans than that! Nowadays with some money lenders you can choose to spread your repayments into more than one installment. But, as more and more Canadians are living in a state of financial vulnerability, the appeal of these types of loans becomes somewhat more obvious.

DO YOU LIVE PAYCHECK TO PAYCHECK?

A recent poll by the Canadian Payroll Association found that 47% of Canadians live pay check to pay check and would not be able to meet their financial obligations if their take-home pay was delayed by even one week. With this knowledge, the popularity of quick cash advance loans becomes more obvious. What happens when an unexpected financial hardship occurs? If you do not have money set aside for just such an emergency, the need to access funds becomes a reality.

GOVERNMENT REGULATIONS FOR LENDERS

Enter the payday lending industry! Years of ridiculously high interest rates and high penalty fees have unfortunately left the entire trade with a bad rep. But, that is quite unfortunate, as many same day loan lenders operate completely legitimately and offer a product that is quite necessary for millions of Canadians. Nowadays, many lenders are governed by regulations in each province in which they operate in. Things such as interest rates, NSF fees, length of the loan, etc… are regulated.

QUICK CASH ADVANCES

The simplicity and speed at which you can receive this type of loan is another major factor in its popularity. Quick cash advance loans usually require the guarantee of a direct withdrawal of funds on your next pay check. So, there is no lengthy wait while they check credit scores, fill out paperwork, get signatures, etc… Most online loans can be completed within minutes and you can even, with certain lenders, receive your funds the same day. That makes these type of loan extremely appealing when you are dealing with a financial emergency. Some lenders, such as iCASH.ca, have even launched an APP making the process that much simpler.

While needing a payday loan is never ideal, the fact that these lenders are there when you need them is reassuring. I would recommend doing a little research before applying with a lender to make sure they are operating legitimately within your province and always read the fine print!

Sierra Bittany

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