Banks Alternatives to Payday Loans
The quick facts
- Over 99% of Canadians have a savings account1 with a financial institution1 like a bank, credit union or other financial institution.
- Only 4 percent of Canadians have taken out a 2 payday loans.
- A bank account is required to be eligible for a payday advance.
The bottom line
Canada’s banks offer convenient products and services at an affordable cost that are more accessible than payday loans.
What’s a payday lender?
A payday loan is typically unsecured and short-term and can be repaid in a matter of days. Find out how paydaychampion.com’ consolidate payday loans ohio
Short-term, short-term loans are available from banks
Canadians have a variety of credit options, including short term loans that can be extended for as little as a week.
- Lines of Credit: Customers can get a line credit that allows them to borrow the exact amount they need from a bank. The amount borrowed is the only interest charged, not the entire amount made by the bank.
- Credit Card Cash Advances: Credit card holders can withdraw cash from their credit cards accounts at an ABM or branch bank.
- Overdraft Protection: If customers sign up and are approved, banks will allow them to withdraw more money from their bank accounts than they currently have. An overdraft is the excess amount. The service is offered at no cost, but the bank may charge interest on the excess amount.
These small loans and credit options can have interest rates ranging from 11% to 21%.
Understanding the cost of borrowing
Payday loans: Market trends – The Financial Consumer Agency of Canada (FCAC), notes that only 4 percent of Canadian households use payday loans.
Payday loans are more expensive than other loans offered by financial institutions.
Banking is simple
Banks understand how important it is for customers to have access to products and services. Canada has easy access to banking services.
Canada’s banks are committed to making banking services available.
- Mobile and online banking: Canadians love convenience. Mobile and online banking continue to grow in popularity. To offer their customers secure, convenient and safe ways to complete nearly all of their banking transactions, banks continue to enhance their online banking sites as well as their mobile app.
- Cashing out cheques: Customers who deposit a cheque at a bank immediately receive the funds. The bank must immediately make $100 available if the account is placed on a cheque-hold period. Banks will cash federal government checks up to $1500 even if there is no bank account.
- It’s easy to open an account: To open a Canadian bank account, you will need two pieces of identification. There is no need to make an initial deposit in order to receive income.
- Accounts No fees or low fees: Basic banking accounts can be opened at $4 per monthly or less for students, youth, seniors, beneficiaries of the Registered Disability Savings Plan (RDSP), and seniors who are eligible for the Guaranteed Income Supplement.
- Extended hours branches: Branch networks are constantly evolving. Many of Canada’s 5,820 branches offer extended service hours.
- Banks actively take part in financial literacy: Banks and CBA place financial literacy at their top priorities. Many community programs are sponsored by banks, and bankers donate their time to the CBA.Students, Your MoneyAndYour Money Seniors financial literacy programs.
Banks are open to working with clients in financial trouble. However, banks believe that lending additional credit to people who have difficulty managing their finances is not in the best interest of their customers.
Banks want to help customers solve their financial problems. A bank can consolidate loans or give money management advice.
Canada’s banks offer substantial financial assistance to non-profit credit counselling agencies. This helps people who are in too much debt to pay it off. They also offer education and training to help clients manage their money and credit better, so that they can avoid future debt problems.