Business regulations in any country are meant to help owners and companies to progress. In a way, this benefits not only their business but the supporting industries as well. And of course, the country’s economy grows.
In Canada, running a business means that you have to pay more attention to your cash flow. For example, after paying all the taxes and salaries for your employees, you would still need to cover regular expenses. These may include utility bills, office rents, maintenance costs, and so on. And after all this, you would also need to manage your profits and your own salary.
Lately, there has been an upsurge in the fintech industry. More and more entrepreneurs are entering the digital domain for financial management. And they are offering their services by integrating finance and technology.
With this upsurge, a mutual industry is benefitting the most. According to the experts at Personal Money Network, since the pandemic has struck there has been an increase in payday loan applications. And most of these loans are being sought by young entrepreneurs and fintech corporations.
So, what are these short term loans, and why are they becoming so popular?
What is a Short-Term Loan?
In simple words, a short-term loan, as the name suggests is offered for a shorter period. Unlike conventional personal loans, these loans do not require any collateral or guarantee. In other words, as a borrower, you can expect a loan approval even if you have zero or no assets to show.
Notably, these short-term loans are also known as high-risk loans, for the reason, there is no collateral involved. So, it is quite obvious that the lenders have more control over the rate of interest and loan tenure.
To put this into perspective, think of a situation where you need urgent cash. You’d look for a private lender that can offer you a loan within hours. And online payday loans make perfect sense in such situations.
Furthermore, the application process is kept simple to ensure no-fuss loan processing. It’s as easy as it could get. You can visit any online money lending website, fill in your details and access a list of lenders that match your requirements.
On this note, it would be better to know what you should expect when you apply for an online payday loan.
What to Expect when you Apply for a Payday Loan?
Of course, payday loans could seem like the most convenient option when you need urgent money. Particularly, if you own a business and you’re running short on cash.
A payday loan can ease your situation in more than one way. For example, you can pay salaries to your employees, or you can cover your utility costs. You can even sort out any medical emergency for your employee if you need to. But your application should not be based on these factors only. You need to consider other factors as well.
Here is a list of factors that you should consider when applying for an online payday loan.
Quick Loan Disbursal
One of the many reasons why borrowers choose online payday loans is fast processing. Usually, lenders that offer loans online would credit the loan amount into your account within 24 hours. The time of loan disbursal is calculated from the moment your loan is approved.
Whether you apply through a money lending network or through a lender’s native website, expecting a quick loan disbursal is indispensable. You can think of it as a mandatory prerequisite for online money lenders.
Higher Loan Amount
When you apply for an online loan, you will be connected with more than one lender. Ideally, the lenders would go through your credibility status. In other words, they would like to ensure that you can repay the loan and that too in a given time.
For this, the lenders usually take a look at your monthly income. Depending on your monthly transactions you can expect a higher loan amount. Typically, payday loans vary somewhere between $100 to $2500. But, there are chances that you can avail of a loan amount as high as $10,000 in one go.
Lower Interest Rates
One of the most significant features of online money lending networks is that they connect you with many lenders. It is quite obvious that when more than one lenders offer you a loan, you can expect a competitive rate of interest.
To put this into perspective, think of it this way- you apply for a loan, around 10-15 lenders offer you their terms and you get to choose anyone. And when you have a choice, you would surely choose a lender that offers you the lowest interest rate.
Flexible Repayment Options
To your surprise, you can also expect some flexibility in repayment options. Not that you can repay whenever you like, but you can choose your repayment tenure. Although usually, the lenders would need you to repay as soon as possible, you can still opt for a one-time repayment or choose to pay in installments.
Quite amazingly, online short-term money lenders would offer you more than one option. In other words, it won’t be like you will be offered a single option by any lender. All the lenders, would usually, offer you more than one repayment option. And you can choose any that suits your financial condition right now.
No-Credit Checks
The primary reason why most of the borrowers seek online loans is- there are no credit checks. As already mentioned, the lenders would only need to check your income source and your credibility.
So, in short, you can expect to receive a loan without having to go through typical credit score checks. Regardless of your credit score or your credit history, you are likely to receive a loan.
With so many benefits, it is obvious why so many fintech companies are opting for online payday loans. And with the pandemic affecting the financial situation for all, these short-term loans seem like a relief for urgent and emergency cash needs.