Requirements for a Payday Loan
Borrowers seeking payday loans should be at least 18 years old. They should also have a bank account and a regular source of income to ensure that they will repay the loan, including Employment Insurance, full or part time job, and Monthly Pension. Moreover, they should not be on the verge of filing for bankruptcy.
The Law of Payday Loans Ontario
The Payday Loans Act, 2008 protects the rights of people who borrow these loans. It provides that you cannot be charged over $18 per $100 that you borrow. You are allowed two business days to cancel a payday loan agreement without being penalized, paying a fee, or without giving a reason for your actions. Further, you cannot be offered goods and services in connection with the loans. Additionally, rollover loans are highly prohibited since a borrower cannot be given a second payday loan before repaying the first loan.
Payday Loans in Ontario Quick Facts for Borrowers to Consider
The Rules for the Payday Loans Lenders
Lenders must have a legal license from the government of Ontario and follow the rules in the Payday Loans Act, 2008. The license should have the lender’s legal name, a license number, a location of the office to which the lender’s license relates, and the expiry date of the license. Lenders should clearly indicate the amount of loan given to a borrower, the number of days for repaying the loan, and the amount to be repaid while advertising their lending services. Additionally, they should never accept a direct deduction from the borrower’s paycheck.
Borrowers who have not repaid their loans cause a lot of inconveniences. However, the lender cannot use threatening language or unreasonable pressure when demanding the loans. They should not contact the borrower more than three times a week without including a regular email or holidays such as Thanksgiving Day, Christmas Day, Good Friday, Victoria Day, and Canada Day.
Lenders should not contact the borrower’s spouse, family, relatives, neighbors, and friends at any time. They should not process a pre-authorized debit or a post-dated cheque more than once. This is because the borrowers will be charged an overdraft fee or fees for insufficient funds by their financial institutions. Therefore, borrowers are advised to recover the above fees if the lender attempts such processes as well as being exempted to pay the cost of borrowing the payday loan.
Significant Insights before Getting a Payday Loan in Ontario
Before proceeding to borrow the payday loan, borrowers should check the lender’s license whether they are borrowing from an online or retail store lender. The license should contain an Ontario license number. They should also be vigilant with companies that fake to be online payday lenders. These companies collect borrowers’ personal information and sell it to a real payday lender.
Borrowers should, therefore, plan on how they can obtain enough money to repay their loans as well as the day of repayment. They should know how much money they will pay when it is overdue. Borrowers should understand the cost of borrowing the loan and the amount they will be charged if they delay to pay back on time. They should also check whether they are being charged over $18 per $100.
