The laws and regulations that govern payday loans vary from place to place. In some regions, payday loans face minimum scrutiny and restrictions, while in others they are outlawed. These limits also pertain to the extra fees charged and the annual percentage rate (APR). Payday loans are characterized by small loan amounts, fast cash turnaround, and the reliance on your next paycheck. It is important to note that there are many other factors, including state law that will affect the amount you can borrow.
The payment terms for payday loans are structured as one wholesome payment. However, it is not uncommon to find loans whose repayment is structured in installments over a long-run period. Although many individuals view payday loans as having a substantial risk exposure to the financier, it is important to note that they have an almost equal risk as other credit options in the long-run.
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The requirements of Payday Loans Toronto
As in most other places, the conventional lending system in Toronto is filled with endless paperwork and bureaucratic red-tape. Therefore, getting a loan that will enable you to resolve impromptu financial challenges from such institutions is close to impossible. This is why many people go for payday loans Toronto. The reasons why it is a preferred alternative include:
- It is a hassle-free method because there is no need to set any appointments with credit managers and other lenders. The whole process is facilitated online, and once all requirements are met, the loan is approved and directly deposited into your account.
- The creditors or financiers of payday loans Toronto do not place heavy emphasis on the creditworthiness of a borrower. This reduces the chances of the loan request being rejected.
According to an amendment to the Criminal Code of Canada (2006), provinces have been given the authority to establish their mechanisms and laws to regulate payday loans. The rules that govern payday loans Toronto include the following:
- The borrower must have an active bank account
This is a requirement because it gives the financier of payday loans Toronto, an insight into the financial situation of the individual. It also serves as a proof of employment because payment arrangements can be deducted directly from an individual’s salary, an active bank account is a fundamental part of the approval process.
- Proof of residency is required
Laws governing payday loans Toronto require the borrower to be a resident of Toronto, the place where loan payment is to be made. Proof of residency can be in the form of a driver’s license or a provincial ID.
- Be past the legal age
The minimum age requirement for an individual to receive payday loans Toronto is 19 years and above. This is because it is the legal working age, and the borrower is much more likely to have an active bank account and stable employment.
Payday loans Toronto have a fixed APR, and this ensures that lenders do not practice usury, which is the charging of excessively unreasonable interest rates. The loan period for payday loans Toronto is usually between one to six weeks.
Payday loans Toronto are the best alternative for cash-strapped individuals with immediate financial needs as they are faster and face less scrutiny. Once all the above requirements are met, the borrower is approved for a loan, and it is deposited directly into their account.
