Fast payday loans come as a temporary financial assistance till the next pay cycle. There can be situations wherein the people get in to short term financial crisis. At this juncture, these fast payday loans come to the avail of such prospective borrowers, who are looking forward to fulfill their financial need and clear out the loan by the next pay date. Instead of visiting a typical banking organization and applying for a loan with a number of documentation,short term loans serve as immediate appetizers to the financial stress caused by the need of money.
The lenders generally lend to the people with an income stream and have been employed with a fixed salary by a fixed date every month. It may be possible that people who were employed at some point of time can get the benefit of fast payday loans by the means of income from other sources. But to anyone who does not have any income flow cannot apply and receive payday loan.
Most of the applications of payday loan are generated through the retail storefronts. Online channel is also the other popular channel for such applications. People like to walk in the store, discuss their credit situation and come back with the approved loan. Online channel is fast and effective, but sometimes it lacks the personalization.
Fast payday loans go by its name of being real fast in processing with a quick turnaround. The customer is required to visit the store or apply online for the loan. The application requires him to furnish basic information about himself and income related data. The lender then evaluates the entire information to approve the eligible amount which the borrower can obtain. The borrower is also told about all the conditions applicable to this loan like the repayment procedure and the timelines, interest rates, the applicable charges, penalties and implications on non-payment of the loan amount.
Attaining faster credit through Fast Payday Loans in Canada
The contractual agreement which the borrower enters in to while taking a fast payday loan clearly cites multiple implications on the borrower. These implications can be in the form of
• Financial Implications
: Penalty fee- In a typical scenario, the normal fee ranges from $15 to $40 per $100 for these fast payday loans. But in case of a non-payment or non-sufficient funds, additional fee can be charged from the lender. This additional penalty can be to the likes of extra $20 for non-sufficient balance and over 10% of the principle when the debt becomes 15 days overdue. Each lender has own terms of penalties which will be mentioned as a part of the contract.
• Degradation of credit history
: In case of failure of repayment of the required amount, the lender may choose to report this default to the credit scoring agency. This report may get reflected in the credit check of the borrower till the time the entire amount has not been cleared off by the borrower. The record only improves after the borrower completes the entire obligation in full and final.
• Renewal procedure
: the customer when unable to pay off the fast payday loan can approach the lender for a renewal of the loan facility. The renewal term can range from 15 days to another month and varies from lender to lender. The renewal incorporates charging of penalties and fee, and can also imbibe a change in the rate of interest calculations. The lender can also specify the number of times a debt can be renewed beyond which the borrower cannot carry it forward and has to clear all the pending dues.
• Debt Collection Program
: initially the lenders can resort to doing a soft collection program by the way of regular reminders, SMS, Calls or emails. They are allowed to try all possible ways of collection of the dues which are governed by the Fair Debt Collection Practices Act. Although there is also a possibility of debt being sold by the lender to a recovery agency who are also entitled to recover money from the borrower.
There are few alternatives available in lieu of the fast payday loans. Most of the people facing similar financial crisis look forward towards borrowing money from their family or friends. Or there are situations where in they sell or pawn their possessions in order to raise money. Going to a formal bank or a credit union is also a recommended option but that requires a greater documentation and involves higher processing time period.