Four Tips for Receiving the Best Payday Loans in Canada
Canada payday lending is different than in most other countries where these types of loans are offered. The main reason is that the country has some very tough payday lending regulations. While some other countries have limited interest that payday lenders can charge, they have allowed fees to continue resulting in what still amounts to at least 200% APR and, in most cases, the rate is much higher.
In Canada, however, the maximum rate allowed is 23% and that includes interest and all fees. This new limitation went into effect late in 2009. Other strict regulations have also been placed on the Canada payday lending industry. While some locations allow borrowers to have several payday loans at one time, Canada only allows each borrower to have ONE loan at a time. This restriction was put in place because some consumers ended up owing far more than what they made each payday, creating a cycle of financial hardship that was impossible to correct.
For the same reason, Canada payday lenders are only allowed to loan 50% of a borrower’s income. This means that no borrower will be in the position of having to hand over their entire check come payday.
These changes in payday lending legislation were not popular with lenders, but consumer groups were thrilled at the changes. Many felt the old, more lax regulations did not do enough to protect consumers from practices that some felt were predatory.
Now that the interest rates and fees are the same across the board, finding the best payday loans in Canada is more about customer service and convenience. Below are some tips for getting the best.
Use the Same Lender
Since the interest rates are the same, you do not have to wonder if there is a better deal on a payday loan down the street. That means that you can build a relationship with one payday lender. Of course, the goal is not to use these loans very often, but when you do it’s often best to stick to one lender.
In general, you will be able to get your loan processed more quickly than if you were a first time customer. Also, if you have a good relationship with a certain lender, they are more likely to let you come in a day or two late when a payment is due should something come up.
Pay Loans Back Early
Even though interest rates for UK payday lending are much lower than in some other places, it is always beneficial to pay the loans back early. You will save money on how much you will have to pay in interest and even if it is just a few dollars, that is a few more dollars in your pocket.
Don’t Rollover Loans
Another key to making the best use of payday loans is to resist the urge to take out another loan shortly after one has been paid back. This creates a cycle of borrowing that ends up costing the borrower money and time and only creates more financial hardship.
Instead, use payday loans sparingly and only as a last resort. Some other options that could help you meet your short term financial difficulties include using an overdraft line of credit from your bank or taking a cash advance on a credit card.
Payback Options
Find a loan that allows you to come in and pay back the money that is owed rather than a lender that wants to access your bank account directly. Sure, most of the time there will be no significant problems with a lender directly debiting your account, but there is always a chance that there could be issues.
Rather than dealing with the headache that can result from trying to fix an incorrect, early or double charged debit, just avoid this possibility entirely.
Some lenders require that the loan be paid back via direct debit, but not all do. Shop around until you find a lender that does not have this requirement.
Again, finding a good deal on a payday loan in Canada isn’t the issue. Instead, you can focus on finding a lender that is convenient and where your business is valued.
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