11 Jul Online Payday Lender or Local Bank?
A payday loan is a high interest cash advance that is required to be repaid in a short period of time. These loans require minimal formalities as compared to normal bank loans. Fast payday loans are easily accessible owing to the minimal formalities involved and convenient payback terms. Today, payday loans are offered through either physical shops or online websites.
As opposed to normal bank loans, the lender does not require a security to guarantee the payday loan. Though they come with a higher interest rate than normal bank loans, payday loans in Canada are essential when it comes to providing a fast means of financing especially during emergencies. Since some payday loan lenders allow borrowers to pick their desired payback date, they provide a convenient mode of financing.
How Payday Loans in Canada Work
To get a payday loan, you can visit a physical store or go online. For physical stores, the borrower writes a check to the lender of the amount plus interest rate payable on a specified date. The borrower is required to provide employment information, as well as banking information. Additional information required may include contacts of friends or family members in case the borrower defaults in payment. Once the borrower provides the requested information the fast payday loans provider deposits the money in the borrowers account in 240 hours. Online, borrowers are only required to fill in a virtual form and then get the instant payday loan processed. This procedure is simpler as compared to bank loans that require security as well as a lot of paperwork to be done before the loan is processed.
Rollovers for Fast Payday Loans
When a borrower is unable to pay the loan at the agreed period, rollovers can be activated where the due date of the borrowed amount plus interest is moved forward. It is important to note that every time the fast payday loans debt is carried forward additional interest is incurred. When the amount is pushed forward many times, then the debt may grow quickly in a short span of time. On the other hand, defaulters of normal bank loans forfeit their security once they are unable to pay their loan installments.
When you compare fast payday loans with other available short-term financing options, you will notice a big difference. Overdrafts are the fastest short term financing options offered by banks, these require extensive employment data to verify the borrower’s ability to pay. To qualify for an overdraft, it is necessary to have a clean credit history which most people lack.
As opposed to credit cards that charge a higher and lower interest rate, fast payday lenders have a definite interest amount. When you pay your credit card bill the Credit Card Company or bank deducts the lower interest rate debt and leaves the higher interest rate debt to grow even more.