Budgeting your money and staying within that budget will significantly increase your odds of financial success. However, that is not always the case.
Having unforeseen expenses is inevitable and can be cumbersome. We have no way of knowing what the future holds, but preparing for specific situations and knowing what to do with them will help you pull through easily.
Applying for a loan can be discouraging for people with poor credit scores. This is especially true for those with no credit because this is the basis of what lenders use to assess a borrower’s creditworthiness.
However, there are ways to have credit on file and boost your low credit score with the help of credit-builder loans. These short-term loans are meant to help people build credit and rebuild poor credit scores that typically last between 6 and 24 months.
Credit-builder loans are great tools. However, 6 to 24 months of waiting does not work for everybody, especially in emergencies where the money is needed immediately.
That is where payday loans can come in. These are loans you can take on even if you don’t have credit or have a low credit score.
What is a Payday Loan?
Payday loans are short-term, with a typical repayment period of only 14 to 31 days. As the name suggests, you pay the loan on your next payday or pay-cheque. It is an unsecured debt, which does not require the borrower to have any collateral.
Unlike personal loans, payday loans do not run credit checks. This makes them ideal for people with no credit or low credit scores.
These are excellent options for people without access to credit cards and other financial services like banks and credit unions. They have fewer requirements and faster application processes than those traditional services.
When a loan application is approved, the funds are often released to the borrowers within hours of applying. Payday loans are given in lump sums, typically amounting to $100 – $1,500.
What To Consider When Applying for Payday Loans
Knowing what financial tools to use if you are presented with unexpected expenses can ease anxiety and lower the chances of getting into more debt. However, knowing these is not enough. You must also consider several factors before you apply for a payday loan.
Check the Fees and Interest Rates
One of the downsides of payday loans is that they come with higher interest rates and fees. Plus, you’d have to pay a significant amount for the penalty if you can’t pay during the agreed period stated on your loan agreement. So, unless you’re in dire need of emergency cash or are sure you can repay your loan on time, it’s best to think twice before applying for a payday loan.
Go for Trusted Service Providers or Lenders
Using reputable service providers offers more security and peace of mind because you can be sure that your financial information will not be mishandled. Check a lender’s history, track record, and ratings. Read reviews about them.
There are lenders such as GoDay that have excellent and plentiful reviews on TrustPilot. Getting payday loans from GoDay is fast and easy. Compliant with all Canadian laws and regulations, they’re accredited with the Better Business Bureau. They’re also 100 percent Canadian-owned and operated.
The information here covers only the bare basics of payday loans. If you wish to apply for one, you must do your research first. You need to make an informed decision, so you don’t get into more debt than you should.