Published on February 18th, 2010 | by Canadian Credit Expert0
Payday Loans are Quick Cash in Canada
Payday Loan Definition
What is a Payday Loan?
In Canada a payday loan is a short term loan designed to give individuals fast access to cash. The term “payday” comes from the source of the loan, which is usually the borrowers future paycheque.
When someone takes out a payday loan, they are commitment to repaying the loan plus charges on their next payday.
Canadian payday loans, which, are often used as a bridge between paycheques are also known as cash advances, payday advances or pay cheque advances.
Payday Loan Customer
Who are Payday Loans for?
Payday loans are popular among Canadians living paycheck to paycheck and individuals with sudden or unexpected expenses.
Cash advances still require a loan application but because most payday loans are issued against an upcoming paycheck, they are easily available to applicants with bad credit.
Payday Loan Terms
How do Payday Loans Work in Canada?
The terms of a pay day loan can vary, however they almost always revolve around the debtor paying back the full amount of the loan at a high interest rate. Once the receipient of the loan receives their regular pay from their employer they are obligated repay the cash advance.
Payday loans are almost always arranged before the loan is issued, with the borrower supplying the lender with a recent paystub, valid ID, a blank cheque and sometimes even a recent bank statement.
Cash Advance Lenders
Get a Payday Loan in Canada
In Canada there are many lending sources that offer pay day loans, with one of the more common being Money Mart Canada. Other payday loan companies in Canada include Cash Express, Cash Money, Mogo Money and more.
Many cash advance lenders in Canada offer other money related services, including wire transfers and cheque cashing services
Loans and Credit Bureaus
Do Payday Loans Report to Canadian Credit Bureaus?
Unlike credit cards or car loans in Canada, most payday loans do not report to the credit bureau. This is good news for any Canadian with a pay day loan. By not reporting to Canadian credit bureaus payday loans remain “hidden” from lenders, employers or anyone else that may check your credit file.
This unique advantage to payday advances prevents banks or lenders from knowing their potential customers are seeking cash advances to supplement their income.
Payday Loan Collections
What About Payday Loans and Bad Credit in Canada?
While cash advance loans in Canada won’t be visible on your Canadian credit report, a payday loan collection will be. Just like any type of credit, there is an expectation that a cash advance will be paid off when its due date arrives. If you default on a payday loan or fail to pay off your advance, then you run the risk of having the debt written off and sold to a collection agency.
If a payday lender decides to file a collection against you, it will definitely report to your credit file. A cheque cashing collection on your credit report will be considered bad credit and taken serious by any lender, bank or employer thats pulls your credit file.
Please if you decide to seek out a payday loan make sure you understand your obligations and only do so if you’re certain its the right decision.