There are many online lenders offering payday loans in Vancouver. However, while useful, we here at 514Loans believe that installment loans are better. Not only do they achieve the same thing (quick and inclusive access to funds online), but they are also safer and more flexible.
Let’s look at why this is so:
Payday Loans Are Antiquated
Payday loans are no longer the only option for those needing an urgent, short-term cash injection. Modern online lenders like 514Loans have developed a variety of better, more flexible lending options that offer more favourable lending terms than traditional payday loans.
Traditional payday loans are rather rigid and inflexible, requiring borrowers to repay the loan upon receipt of their next paycheck. This is often not feasible and can quickly place the borrower into a debt spiral that’s difficult to get out of.
Installment loans, by comparison, allow for more flexible repayment schedules spread out over a more reasonable period of time, with fairer interest rates and more doable installments.
Payday Loans Are Far More Expensive
To give you an idea, in Canada, many payday loans come with an annualized borrowing rate (ABR) of 390% to 560%, which is an eye-wateringly high cost for any loan, even over a short period. The ABR only really accounts for the interest rate and doesn’t factor in things like origination fees, service charges, and other costs associated with the loan.
At a 560% ABR, borrowing $100 for four weeks (one month) would cost you about $43 in interest, making the total repayment about $143. When you factor in other fees, the final amount owed would most likely come to about $200.
The longer you take to repay, the amount grows exponentially. If, for example, you took 12 months to repay a $100 payday loan at an ABR of 560%, you’d end up owing about $5,850 at the end of the year!
By comparison, installment loans from 514Loans are offered at a far more reasonable annual percentage rate (APR) of 22% to 32%. The APR comprises the interest rate as well as any other costs related to the loan, such as origination and service fees, making it a truer reflection of the total cost of the loan.
At a 32% APR, borrowing $100 for four weeks would cost you only about $2.50 in interest, making the total repayment about $102.50. Over 12 months, a $100 loan would only cost you about $132.
If you’re looking for a better alternative to payday loans in Vancouver, then 514Loans has the perfect solution for you. Our installment loans require no credit check and can be approved in minutes. Apply now!