An online payday loan is a life saver for a person who may have a poor credit score, but needs access to funds quickly. These people do not have the ability to borrow money through traditional means, such as going to a bank and asking for a personal loan. When you have a low credit score, you may not even qualify for most credit cards.
That is why you will see so many people using payday loans. They are easy to obtain, while they have very friendly terms. The issue is that you cannot rely on loans for the rest of your life.
Below is a guide that explains how to get a payday loan, and then discusses the ways to improve your financial position and credit score.
Obtaining a Payday Loan
Getting online payday loans in Ontario is not difficult in the least. There is a very straightforward process that you must go through to apply for online payday loans Ontario.
You will visit the website of the relevant lender, enter your personal information, and submit your application. Most of the top lenders in Canada have online application platforms, where you can get a near instant decision about your loan.
The advantage to such a system is that you know how much money you can borrow within minutes. Then you can assess the loan contract, agree to the terms, and start the process for receiving the money.
Those who provide a bank account when they are applying can get the money through direct deposit. That means you could have the money in your bank within 48 hours or even sooner.
Paying Off a Loan Responsibly
Payday loans are not meant to be debt that you are holding onto for many years. These loans do not have any credit check, which means they come with a higher than usual interest rate.
When the interest rate is high, you will want to pay off a loan as soon as possible. Perhaps you are taking out a payday loan with a 300% APR. Such an interest rate could result in you paying three times as much as you borrowed if you wait a year to pay back the money.
That is why most payday loans are repaid within a few weeks. When you borrow using payday loans, you must make a plan for repayment.
Such a plan should be made by determining how much money you are bringing in through your job in the next few weeks. Assess whether that money is enough for you to pay back the loan and deal with your usual expenses. If you can make that happen, you are in a great position to borrow money.
Achieving Financial Stability
The endgame for every person is to achieve a state of financial stability when you do not have to depend on a short term loan for survival. That is what you want to accomplish, but how can you get there?
The first step to improving your financial outlook is to create a budget. You must have a clear understanding of how much money you are making each month, and then compare it to your spending from the previous month.
If you see that you spent more money than you earn, on average, do not panic. Rather than being hard on yourself, be pleased that you have recognized the problem. Now you can take steps to fix the issue by limiting your most unnecessary expenditures.
Boosting Your Credit Score
One of the reasons why you may have needed a payday loan is having a low credit score. If you take out a secured credit card, and pay off the full balance each month, you can improve your score within a year.
Then you can apply for regular credit cards, follow the same process, and get your score to a respectable level. Having a higher credit score means you can get low APR credit cards and personal loans, along with mortgages, car loans and other credit lines.
There is no doubt that boosting your credit score up by a few hundred points is a tough process. You will have to work hard to pay off your debts on time for years, but all the effort is worthwhile.
Take out a payday loan if you have no other way of accessing quick cash. Be sure to repay the loan on time, and then take steps to regain control over your finances. By being frugal, saving money, and improving your credit score, you can achieve a healthy long term financial outlook.
Story by Denise Larson