Many people are under the impression that in-store payday loans and online payday loans are the same. We beg to differ. While both are a category of payday loans and offer you a quick credit option, the experiences they offer are different.
There is no good or bad option here for acquiring a payday loan. An individual might prefer one over the other. However, either option offers its own set of conveniences. As such, here’s everything you need to know about online and in-store payday loans to help you make a more informed decision about which one to opt for your financial needs.
What is a Payday Loan?
Before we move on to in-store and online payday loans, let’s first understand what payday loans entail.
Payday loans are short-term loans of usually small amounts that are perfect for taking care of emergency expenses until your next pay cheque. You can use these loans for any kind of expense without any restrictions.
This unsecured loan requires no collateral, no background checks, and no credit checks. Most lenders only require borrowers to have a valid bank account, a living address, and proof that they have been employed for at least 3-months.
When the need for money is urgent nothing beats a payday loan!
Payday Loan Regulations In Canada
Every Canadian province has a set of regulations that include the maximum amount that can be borrowed, the maximum fees that a lender can charge, and the length of the payback period. In most provinces, a maximum loan amount of $1500 can be secured as a payday loan or up to 50% of your next pay cheque.
In most provinces, Red Payday lenders can charge up to $15-$30 per $100 lent and offer a payback period of 14-days or until an individual’s next pay cheque is due.
These regulations are designed to keep borrowers safe from falling into debt cycles with caps on the maximum interest that a lender can charge and the maximum fee that can be imposed for untimely payment.
Whether you are going for online payday loans or in-store payday loans, make sure the lender you choose abides by your local provincial guidelines.
Online Payday Loans Vs In-Store Payday Loans
As the name suggests, an online payday loan is one that you apply for online. Whereas, in-store payday loans require you to pay a physical visit to the lender’s office to receive the amount.
Here’s how each method offers a different experience:
● Customer Support
When you go for an in-store payday loan, you get a chance to have all your questions answered face-to-face. You get to inquire about hidden charges, early repayments, penalties, etc. This way, you make informed decisions.
If you don’t like any of their terms and conditions, you can always walk out the door and look for another payday lender. This kind of customer support is recommended if you are lending for the first time.
In an online payday loan, the customer support is there via helpline, but you’ll have to seek it out. People who aren’t comfortable calling and asking tons of questions will have a difficult time getting all their answers.
Instead, your first source of information is the guidelines available on the website. This could be a downside for first-time borrowers as they can miss out on hidden charges and other regulations. On the contrary, it can be quite convenient for regular lenders who simply want the money they need as quickly and conveniently as possible.
● Processing Time
In-store payday loans have a longer processing time than online applications. The entire process of arriving at the store, moving from lender to lender until you find a suitable one, waiting in line, etc. can take time.
Online payday loans take the lead in this one. From the comfort of your home, you can apply for the loan and have it processed within 20-30 minutes. A few clicks and a short form later, your application process will be in motion.
● Access To Money
In-store payday loans in Canada might have a longer processing time, but by the time you walk out, you might already have access to the borrowed amount.
On the contrary, online payday loans can start your application process within minutes. However, it might take a day or two for the loan to be approved and the money to be transferred to you.
This rule isn’t set in stone. Some lenders swear by quick access to the money and can transfer the amount in an hour or two. Others can take 2 days.
When it comes to convenience, nothing beats online payday loans. With access to the internet, you can apply for a loan wherever you are at the moment. The entire process takes 5 to 10 minutes, without you having to move from your spot.
You don’t have to talk to anyone, you don’t have to drive, and you don’t have to deal with the intense Canadian cold. Also, there is no standing in line and no waiting whatsoever. If you are short on cash, you wouldn’t want to waste your precious gas or spend on taxi fares to reach the store.
Comparatively, in-store payday loans can be slightly more inconvenient as they require one to physically go to the location. This can cost you time and gas money which given the alternative you can do without.
In-store payday loans can be convenient too if you are already nearby, don’t mind walking, and prefer face-to-face dealings.
Despite their differences, both methods of acquiring payday loans are equally beneficial. An online application option is perfect for those who need some financial help but don’t want to leave the house, don’t want to run into anyone, and don’t want to wait and answer questions. It is also exclusively for those who can wait a day or two to get access to the borrowed amount.
In-store payday loans are still more popular than online applications. Mainly because you immediately get approval and receive the borrowed amount in person. Since payday loans are usually acquired for emergency purposes, this method is preferred by many.
To decide which option is better depends solely on you. We suggest trying both methods and comparing your experiences. Whatever is more convenient and reliable for you is the method you should opt for.