In life, you’ll experience financial challenges that will test your character and decision-making skills. For example, being short on money while your bills are on their due date is a situation that calls you to action – that you borrow some cash to cover your immediate expenses. The good thing is that there are loans that you can obtain even for the short-term.
One of the go-to short-term loans right now are online payday loans. For expenses that need to be paid immediately, this loan type is good because the application process is very straightforward, and you can receive the funds fast. Even if your credit score is below average, your lender may still approve your application as long as you have a regular income.
If tough times require you to borrow money, you can apply for guaranteed payday loans in canada with Friendly Lender. For you to learn more about this loan, here’s a blog article that you should read.
What are Guaranteed Payday Loans?
One of the most attractive features of guaranteed payday loans is their non-conventional credit assessments. Lenders of this loan type aren’t interested as much in your credit score as in your capability to make timely payments. They will check your employment status and how much you regularly earn instead of making a hard inquiry on your credit history.
However, the term “guaranteed” is only a marketing tactic. While it’s true that this loan is suitable for people with bad credit, there are still requirements you need to meet to boost your chances of qualifying for the loan.
When it comes to applying for guaranteed payday loans, you’ll surely benefit from its easy and simple application process. If you want to borrow money through this loan, you can look for a lender online and send your loan application to its website. This trouble-free application process presents another advantage, which is you can access the money immediately.
Payday loans provide you a loan amount ranging from $100 to $1000. But some lenders offer higher loan amounts than this range. You need to repay what you owe in two weeks or one month when your next paycheck arrives.
Since it’s a short-term loan, you need to budget your repayment to avoid extending the loan. When you extend it, you may incur fees, causing your loan to balloon. In such a case, you might find it difficult to pay the loan off, and you may get trapped in a cycle of bad debt.
Consider These Features When Applying for a Payday Loan
You must consider these features before you apply for a payday loan or sign a contract with your lender.
- Loan amount. There are limits on the loan amount you can obtain for a payday loan. Since this loan type is government-regulated, you have to know what is the cap on payday loan amounts in the area where you live. If possible, pick a lender that offers a maximum loan amount limit, particularly if you need to take out a higher sum of money.
- Processing time. Guaranteed payday loans typically have a fast processing time because you can apply for one online. The application process will just take under an hour, and then the lender will check your qualifications. Once you’re approved, you can receive the money in no time.
- Period of repayment. Loan terms of payday loans are also regulated by the government. Make sure to understand the rules on this loan type to protect yourself from predatory lenders. Commonly, the repayment period of payday loans ranges from two to four weeks. But you can also find lenders that offer longer loan terms.
Advantages and Disadvantages of This Loan Type
You have to be aware of the pros and cons of payday loans before deciding to apply for one. Read on below to learn more.
- Easy application process. No need to go to a lending office and meet with the lender because you can just send your credentials online.
- Use the money for any kind of expenses. Traditional loans typically have a specific purpose, but with payday loans, the funds that you get can be used for whatever purposes.
- Available for borrowers with bad credit. Don’t worry if your credit history is not that good because you can qualify for a payday loan as long as you have a regular source of income.
- Borrowers are protected by government regulations. There are limits on loan amounts and interest rates or fees for payday loans imposed by the local government. This is to ensure that you won’t get victimized by exploitative lenders and scammers.
- High fees and interest rates. Payday loans are indeed more costly than traditional loan options. Since lenders of payday loans cater mostly to borrowers with poor credit scores, the annual percentage rate of this loan type typically ranges between 250% to 400%.
- Lenders who don’t follow government regulations. Although there are rules on payday loans imposed by the government, you can still encounter scammers and predatory lenders.
Consider the important features of a payday loan when you’re applying for it. You also need to look into the pros and cons to ensure whether this loan type suits your needs. Revisit this guide for you to understand payday loans better.