Payday loans have become a popular source of credit for people facing financial emergencies, unexpected expenses, or cash shortages. A Financial Planning Standards Council report found that “nearly 40 per cent of Canadians’ bank accounts cannot withstand a financial emergency.”
With fast approval timelines and minimum eligibility criteria, they are often the top choice for Canadians looking for quick funds. While they are a viable option for many, payday loans can also be expensive and risky, with high-interest rates, hidden fees, and the potential for debt traps.
The good news is several payday loan alternatives in Canada, such as personal installment loans, offer more affordable and manageable credit options. At FlexMoney, we offer a variety of Canadian online loans to help our customers feel financially protected at all times.
This blog will discuss some of the most popular payday loan alternatives, including emergency loans, moving loans, medical loans, repair loans, and more. Continue reading to learn which payday loan alternative suits you based on your unique needs.
Why Do People Use Payday Loans?
People use payday loans to cover unexpected expenses or bridge a gap in their finances between paychecks. This includes emergency expenses such as medical bills, car, or home repairs.
Payday loans are a quick and easy way to get cash, with funds typically available within a day. They are also accessible to people with poor credit or no credit history, making them a popular option for those who cannot qualify for traditional bank loans. However, payday loans often come with high-interest rates and fees, which can lead to a cycle of debt for those who cannot repay the loan on time.
Why Should You Avoid Payday Loans?
Payday loans can be an effective solution for those who need urgent cash and can repay the loan when they receive their next paycheck. However, many borrowers cannot do so and take out another loan to cover the original loan plus fees. This can lead to a cycle of borrowing and debt that can be costly over time.
If you’re looking for alternatives to payday loans, you can use an installment loan to build your credit and access the funds you need. This is especially helpful for individuals who need a larger amount of money than a payday loan can offer and want the convenience of making payments over time.
Installment loans are a type of personal loan that allows you to borrow a fixed amount of money and repay it in regular, predictable installments over a period of months or years. This can make managing your money and staying caught up on payments easier. Installment loans also typically come with lower interest rates than payday loans, saving you money in the long run.
Payday Loan Alternatives
Payday loan alternatives, such as installment, personal, or credit cards, may offer lower interest rates and more flexible repayment terms. Consider the following alternatives and make a payday loan comparison by considering a few factors, such as repayment timeline, interest rate, additional fees, and loan terms.
Personal loans are unsecured loans that allow you to borrow money for any purpose, such as consolidating debt, making a large purchase, or covering unexpected expenses. Unlike secured loans, such as mortgages or car loans, personal loans do not require collateral, so they are based solely on your creditworthiness and ability to repay.
This is one of the most popular alternatives to payday loans, and they typically have fixed interest rates and terms, and the repayment period can range from a few months to several years. The amount you can borrow and the interest rate you are offered will depend on your credit score, income, and other factors determined by the lender.
FlexMoney can offer you a flexible personal loan in Canada that helps you meet your financial needs without falling into a cycle of debt. The application process is simple, and the first step involves choosing your loan amount. We offer online loans from $500 to $15,000 for terms of up to five years. Once you determine how much money you need, fill out an application and wait for approval by our automated system. After you are approved, your funds will arrive in your account within one business day.
Emergency loans are a type of personal loan designed to help cover unexpected expenses or financial emergencies. Our emergency loan application process is quick and fast funding, with funds often available within a day or two.
We offer emergency loans in Ontario and other provinces in Canada by using the industry’s leading software to look past traditional credit bureau data. The last thing you want is to go through an extensive in-person interview to get approved for an emergency loan, so we take that stressful step out of the process and allow you to complete the process entirely online.
Medical loans are another type of personal loan designed to cover medical expenses, such as surgeries, treatments, or procedures not covered by insurance. This payday loan alternative allows quick access to cash when needed most, and the repayment period can range from a few months to several years.
When you need cash to fund a medical emergency, the first step is to negotiate payment plans with your healthcare provider or use insurance benefits, depending on your coverage. Your health insurance coverage can vary based on your location, as each Canadian province has its own set of rules.
If your medical emergency isn’t covered by your healthcare provider, rest assured because we offer medical loans in Canada to help customers manage unexpected expenses. The application process is simple and quick, allowing you to receive your funds within one business day after approval.
Repair & Renovation Loans
Whether your car broke down or you want to start a renovation project, FlexMoney offers loans for both scenarios.
Unfortunately, appliances, vehicles, or other assets don’t have a warning before breaking down. But the good news is you can get a repair loan from FlexMoney to cover the cost of repairing or replacing a major appliance, system, or component in your home or vehicle. This can include repairs or replacements for items such as a furnace, air conditioning unit, roof, plumbing, or electrical system in a home or the engine, transmission, or other major component in a vehicle.
You can also apply for a FlexMoney renovation loan if you are planning a major renovation or remodel of your home and need to borrow money to cover the costs. Renovation loans can finance many projects, such as a kitchen or bathroom remodel, a room addition, or a home renovation.
Moving into a new home can be both exciting and overwhelming. Many costs are associated with moving, such as movers, transportation, packaging materials, and storage lockers. Unfortunately, these costs can seep into your budget and interrupt your moving day. The good news is FlexMoney’s moving loans can help you seamlessly move into your new place. All you have to do is figure out how much money you need and customize your loan when filling out your application. Once you receive the funds, you can start moving without the added financial stress.
Benefits of Installment Loans
If you’re considering an installment loan, consider the following benefits before starting your application.
With an installment loan, you will know exactly how much you need to pay each month and for how long. This predictability can make budgeting and planning more effortless and help you maintain your finances.
Lower Interest Rates
Installment loans often have lower interest rates than credit cards or payday loans, saving you money in the long run and from unforeseen bills.
Improved Credit Score
You can use a loan to build your credit, as successfully repaying an installment loan can improve your credit score, making it easier to qualify for loans and credit in the future.
Larger Loan Amounts
Installment loans can typically offer larger loan amounts than payday loans or other short-term loans, which can be helpful for larger expenses like home repairs or debt consolidation.
Longer Repayment Terms
Repayment periods for installment loans can be several months to years, giving you more time to pay off the loan. We allow our borrowers to customize their loan terms, including the option to repay their installment loan within five years of the borrowing date.
Getting an Alternative Loan with FlexMoney
If you’re looking for payday loan alternatives in Canada, we got you covered. Contact our expert customer service team or utilize the resources on our website to get answers to any questions about installment loans you may have. Our goal is to make borrowing simpler so you can maintain your financial health without added stress.