The lender has to review a statewide payday loan database to see if you have any other payday loans. You give the lender the following information – your social security number, and information about your gross monthly income. The lender enters your information into the statewide database to see if you are eligible for a payday loan. If the database says you are not eligible, the lender will give you a toll-free number to call and request more information.
How much will a payday loan cost me?
In Canada, payday loan lenders typically charge the maximum allowed by law – 15% on the first $ 500 borrowed, and 10% on $ 500 to $ 700. The contract you sign with Red Payday, a leading payday loan lender, has to confirm what the effective annual rate of the money is being lent to you. The APR is the interest rate on your loan spread over a one-year period. The less time you have to pay off the loan, the higher the APR.
Are there other surcharges?
If the payday loan lender gives you your loan with a cheque, they cannot charge you to cash your own cheque. You are out of money. You still have bills to pay. What other options do you have? Try to negotiate a payment plan with your creditors. Utility companies, credit card companies, and property owners often give more time to pay. Late fees could be less than the cost of a payday loan.
Alternatives to payday loans are worst
Try to enlist the help of religious institutions or social service agencies. Contact the state department of health and human services. You may be eligible for an emergency assistance program. Banks, credit unions, and finance companies offer alternatives to payday loans that include small consumer loans. You may have a program that allows salary advances. A credit counselor can help you get out of debt and avoid a payday loan. Your bank or credit union may offer credit counseling.
However, none of the above guarantees you a payday amount. They are time consuming, but need less documentation.
How much my payday loan is going to cost?
Yes. By law, the lender must tell you the terms of the loan, including the amount of surcharges and fees and the APR. Many online lenders do not provide this information until after you click “yes” to take out the loan. This is illegal. It could make the loan uncollectible.