When an unexpected bill arrives before payday, a payday loan can look like the fastest fix. But most payday loans are due in full on your next payday, which can leave you short again right after you repay. Before you borrow, it helps to know what other options exist and how to compare what each one will really cost you.
Start With the Lowest-Cost Options
Before taking any short-term loan, check whether one of these can cover the gap:
- Ask for a payment arrangement. Many utilities, phone providers and landlords will spread out or delay a payment if you ask before it is due.
- Talk to your bank or credit union. If you qualify, a small personal loan, overdraft or line of credit usually costs less than short-term lending.
- Ask your employer about a pay advance.
- Borrow from family or friends, with a clear written repayment plan.
- Contact a non-profit credit counselling service if several debts are piling up at once.
How Installment Loans Differ From Payday Loans
If those options are not available, an installment loan is another alternative. The biggest difference is how you repay. A payday loan usually asks for one lump-sum payment on your next payday. An installment loan splits what you owe into smaller scheduled payments over several months.
Because each payment is smaller, an installment loan can be easier to fit around your regular income instead of committing a whole paycheque to one repayment.
What Does a GoLoans Installment Loan Cost?
GoLoans.ca is an online surety (guarantor) service. It evaluates applications and, upon approval, endorses qualified borrowers to its partner lenders. Borrowers with limited or damaged credit can be backed by a third-party surety bond instead of collateral. Applicants with a beacon score over 700 do not need a surety.
Here is what borrowing through GoLoans can cost:
- APR below 32%, with a $1.00 transaction fee on each payment
- A surety fee when a surety is needed
- Example: a $500 loan repaid bi-weekly over 3 months, including a $250 surety fee and interest, comes to about $774 when all scheduled payments are made
An installment loan is not always cheaper in total dollars than a short payday loan. What it gives you is more time and smaller payments. Whatever you choose, always compare the total amount you will repay, not just the size of each payment. Paying your loan off early lowers your cost, and GoLoans offers an early repayment rebate program.
Who Can Apply?
To apply with GoLoans, you need to:
- Have reached the age of majority in your province
- Have a steady source of income
- Have a valid bank account
- Be able to verify your identity
Every application is screened to make sure you have enough income to repay. This includes checking that your income can cover the payments and that your bank account does not show an excessive number of NSF (insufficient funds) charges.
How Fast Can You Get Funds?
The online application takes about two minutes and is available 24/7. GoLoans reports that 91.7% of applicants who apply during business hours receive an answer the same day. Once approved, funds are sent by Interac e-Transfer within minutes. If you are approved before 11:30 a.m. MST on a weekday, you can receive free same-day direct deposit.
Borrow Responsibly
Short-term installment loans cost more than bank loans. Use them only when other options are not available, and as seldom as possible. Taking out several short-term loans at once can lead to debt that is hard to repay. GoLoans collections follow Alberta’s Consumer Protection Act and its regulations.
Frequently Asked Questions
What is a safer alternative to a payday loan in Canada?
Start with a payment arrangement, your bank or credit union, an employer pay advance, or help from family. If you still need to borrow, an installment loan lets you repay in smaller payments over several months instead of one lump sum on your next payday.
Is an installment loan cheaper than a payday loan?
Not always. An installment loan gives you more time and smaller payments, but the total cost depends on the rate, fees and how long you take to repay. Compare the total amount you will repay before you sign.
Can I get an installment loan with bad credit?
Often, yes. GoLoans uses a soft credit check only, and borrowers with limited or damaged credit can be backed by a third-party surety bond. Approval is not guaranteed and depends on income and ability to repay.
How quickly can I get the money?
91.7% of applicants who apply during business hours get an answer the same day, and approved funds are sent by Interac e-Transfer within minutes.
The Bottom Line
Payday loans are fast, but repaying everything on your next payday can leave you short again. Check lower-cost options first. If you still need to borrow, an installment loan spreads repayment over several months. Always compare the total cost before you commit, and borrow only what you can repay.
