No Credit Check Loans in Canada: Important Things You Need to Know

Just imagine yourself not having enough money to pay for an important bill. The amount needed is just small – let’s say $200 – but your next paycheck is one week away, you have already hit your credit card limit, and you can’t ask for that sum of cash from your friends and family.

Now, what are the available options to obtain the money you need?

Of course, there’s plenty of options for you. But if you want to have the cash in no time and with less hassle, you can go to Personal Money Network and come up with the much-needed amount for your important purchase.

However, it’s crucial that you know how no credit check payday loans work before applying for one. This blog article can help you understand this loan option better. So, take a read!

How Does This Loan Option Work?

For those who have questions about why this loan is called a “payday” loan, the answer lies in its repayment term. A payday loan is a short-term financing, which can last for two weeks or one month.

Basically, your paycheck is used as collateral against the sum of cash you borrow. If you get approved for an online payday loan, your lender will require you to provide a postdated check that can be converted into cash on your next payday.

Online payday loans are popular nowadays because borrowers can get the amount they need immediately after approval. The simple application process and the use of e-transfer make it possible for you to access the funds within the day of your application or the next business day. You can also apply for this loan at any time of the day.

Moreover, lenders of this loan type are not strict when it comes to credit scores. They conduct assessments, such as checking your income or employment status, but they don’t ask for your credit profile from major credit bureaus. So, for borrowers with bad credit or no credit, you should consider taking out an online payday loan.

Risks of 24/7 Online Payday Loans

While there are benefits of choosing online payday loans to pay for sudden expenses, you should still be careful of the risks associated with this loan type.

Short Repayment Term

One disadvantage of an online payday loan is its short repayment period. Some borrowers may consider this an advantage because they won’t be tied to the loan for a long time. But a short repayment term can be detrimental when there are sudden expenses that arrive within that short period.

For example, you may not be able to pay the loan on schedule, and it may cause you to extend it. In this case, you may have to pay additional fees for the loan term extension. It’s the reason why some takers of payday loans are trapped in a cycle of debt.

Expensive Interest Rates and Fees

Annual percentage rates of payday loans can range from 300 to 400 percent. For example, most payday loans charge $15 for every $100 that you borrow. Yes, the accessibility of this loan is a factor that most borrowers couldn’t resist despite the exorbitant cost it entails. But if you can’t afford to pay such an expensive interest rate, you better try other financing options.

Some Lenders Will Require Access to Your Bank Account

Not all lenders that offer payday loans will resort to requesting the commonly used post-dated check from you because they think of it as a hassle.

So, instead of the post-dated check, online lenders will ask you to give them access to your bank account, from which they can take your loan payment every time your salary arrives. This is a major drawback because your account may get charged with overdraft fees, particularly when your lender attempts to withdraw the funds from your account repeatedly.

How Do Online Payday Loans Impact Your Credit?

Online payday loans are less likely to affect your credit score compared to other loan options. It’s because payday loans are short-term and small amount loans. Plus, online lenders that provide this kind of financing usually don’t report your payments to major credit bureaus. So, even if you pay what you owe on time, it won’t increase your credit score up a notch.

On the other hand, not paying the loan may drag down your credit score. For instance, when your checking account doesn’t have funds for the loan payment, it will bounce, and your bank may close the account and report this situation to major credit bureaus.

In some cases, your lender may also collect your unpaid loan after winning a court case. The fact that you lose a court case can indeed affect your credit profile negatively.


Online payday loans are a very accessible type of financing, and it’s one of the most preferred loans for people with bad or no credit. However, there are some drawbacks to online payday loans. So, before you consider applying for one, read this blog article for you to better understand how this loan type works.

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