At some point in time, most of us have needed to get some form of external help where our finance is concerned. Whatever the reason, be it to quickly make a deadline payment, restore a misplaced item, or survive until the month’s end. A quick loan is often a life-saver. Sometimes, borrowers may consider payday loans no credit check no employment verification Canada. Is this really the best choice for a loan though?
What if you’re unemployed but urgently need a loan to sort yourself out – can you get a loan? The answer is yes and no. There are several loans with less verification options available in Canada. But, the likelihood of obtaining one is probably pretty low.
There are several companies like this to provide quick loans. This is unlike a traditional financial institution who would not give a loan without a guarantee of you paying it back. Before we go into details about these loan options, let us first define what a payday loan is.
What Is A Payday Loan No Credit Check No Employment Verification Canada?
In general, a payday loan is a short-term loan which can range from as short as 24 hours to a couple of months. Payday loans are deducted at the agreed ‘payday’ by the borrower and have some interest added to the repayment. Here is a great video that goes in to APR in a little more detail:
Payday loans, especially those given out by many financial institutions, require employment verification or some form of documentation to prove your capacity to payback.
A payday loan without job verification is a short-term loan arrangement which offers cash advances to borrowers in dire need of funds. The situation may differ according to the individual; in general, the loans are to handle pressing needs they may be facing. These loans don’t usually need any form of employment verification such as payslips or collateral.
Not only are these loans useful for those that need emergency funds, they are not difficult to obtain. A benefit of payday loans are, they take a short processing time before the money is disbursed. Sometimes, it takes just a few hours depending on the sum.
Can I get a payday loan without a bank account?
Although, most payday lenders don’t require employment verification or perform credit checks on borrowers, they still need some form of identification. Furthermore, a guarantee to ensure that the borrower is properly identified.
Most times, a bank statement is requested with your personal information, contact details, and proof of age. In some cases, bank account details may not be requested, neither is it compulsory. However, this service attracts a service charge before it is approved.
Do Payday Loans with No Credit Check & No Employment Verification in Canada exist?
Yes, they do and they don’t. Despite the claim that they don’t, these loan institutions carry out credit checks depending on the amount of money in question. Employment verification on the other hand would be something the lender should do to mitigate risk. The verification process is also done to determine the likelihood of the borrower paying back as promised. The only time it may be overlooked is if you provide a financial bank statement.
Do Payday loans hurt your credit?
Most times, payday lenders set automatic payments on the borrower’s account. Problems can arise if the lender tries to make a withdrawal and is unable to. Sometimes, this results in an overdraft which may cause the bank to charge the borrower higher rates. At other periods, failure to meet payment deadlines often leads to additional charges being added to the initially high-interest rates. The most important aspect of this type of loan is that you are able to pay it back, on time.
What Are Some Risks of Taking out Payday Loans?
There’s a common saying that goes “anything worth doing, risks are involved”. Payday loans no credit check no employment verification Canada aren’t an exemption to this case. Some risks have been discussed in previous paragraphs. However, there are still some other risks to consider before you take the leap.
- Unrealistic interest rates: lender’s fees usually appear reasonable at first. An instance where a fee of 30% is charged on a $100 loan may not seem high, but it is in reality, it’s a 782.15% APR.
These unrealistic rates tend to keep borrowers in debt longer than they anticipated.
- Repeat short term lending: Whenever a person can’t pay back the loan as at when agreed, lenders offer to let such people take another loan with additional fees.
Research was carried out by the Consumer Financial Protection Bureau in the United States (CFPB) in regard to payday loans. It showed that four-in-five people borrow again from their lenders within a month, and most borrow at least ten loans in a row. This is the reason why refinancing is not allowed in most US states.
- Bank account closure: In situations where a bank account maintains a negative balance for an extended period of time, the bank may close the account. Individuals are then forced to go for high-fee debit cards to pay bills since regular banks will no longer do business with them. CFPB also found that within 90 days of the first insufficient fund’s transaction, 36% of accounts with failed debit attempts were closed by their bank.
Pros of Taking Payday Loans
The last few paragraphs may have looked grim for people trying to get a payday loan. The truth is that payday loans can be useful to some people and in some instances, have other benefits.
Some advantages of taking pay-day loans include:
- Quick access to much needed funds: In case of an emergency, pay-day loans can easily be accessed and used to make the necessary payments as required. It would be paid back when your salary is paid or as agreed.
- Flexible payment plans: Depending on the amount borrowed, lenders and borrowers can agree on a favorable time frame when payment can be made. Some payment packages range from one week to as long as six months.
- Ease of access: Payday loans are much easier to get than other loans. The reason for this is linked to the lack of serious documentation required to apply for them. Unfortunately, the interest rates are higher to mitigate the risk for the lender.
Commonly requested information includes bank account statements, personal information and contact details. Once satisfactory, the money is disbursed promptly.
Steps to Take Before Taking a Payday Loan
Depending on how well these loans are utilized, they can have a positive or negative impact on the individual taking out the loan.
Listed below are some conditions required before it is safe to take payday loans.
- Have A Steady Income: This is an obvious condition to be considered by any logical person. However, this important piece of advice cannot be over-emphasized. A steady income, no matter how small, helps one adequately plan and save towards meeting financial commitments.
- Read through the contracts and agreements carefully: As the saying goes, the devil is in the details. It is known that long and difficult-to-read contracts usually have a lot of things to hide. These most times try to mislead and misinform the reader about some sensitive information that might be crucial later on.
- Research, research, research: It’s usually advised that you thoroughly research the lender before you commit your financial future into the hands of any institution. There are lots of online pay-day loan institutions with amazing offers. Try to get as much information as you can, or talk to people who have used them before.
Are there Alternatives to Payday Loans with No Credit Check or Employment Verification in Canada?
Before payday loans were introduced, we had short term and long term loans (they’re still in existence). These loans are predominantly given out by financial institutions. However, with the advent of payday loans, loans can now be given by banks and other financial institutions including those that operate as a private entity.
Further, there are different types of loans available for you to choose from. Check out the different types of payday loans below:
Personal Loans
These types of loans require people to personally guarantee without the need for collateral. With some lenders requesting no income verification from customers.
Crisis Loans
These type of loans are for your sudden cash-crisis moments. They can be useful for paying rent that’s due before the next salary, closing registration or even to buffer the effect of momentarily losing a job.
Small Loans
These are a common form of short term loans. This kind of loans are easily approved with lax guidelines. The reason for this is the low risk associated with the loan amounts and, as a result, they are less stressful to obtain than other loans.
Emergency Loans
As the name implies, they are loans available for emergency cash situations. These may come with no credit check and no employment verification, but that depends on your lender. Emergency loans can be quickly disbursed to meet urgent needs.
Installment Loans
One of the commonly sought loans, they guarantee monthly installment payment loans with easy monthly payments plans. Lenders offering these options offer long term installment payments on loans as much as 12 months and more. These are probably the safest and most manageable types of loans.
