Money Mart Financial Services, formerly known as Dollar Financial Group, was established in 1979 and now has over 700 significant locations across the US and Canada.
A comprehensive range of financial services is available from Money Mart, including salary/payday loans, instalment loans, prepaid cards, credit cards, domestic and international money transfers, bill payments, and currency exchange.
One of the biggest "grassroots" banks in Canada is Money Mart, and they specialise in serving underbanked clientele.
Payday loans, also known as cash advances, are short-term, high-interest loans with tiny balances that generally have usurious interest rates.
They get their name from the fact that they often involve borrowing money with a post-dated check or permission to withdraw money from an account that will take effect on the borrower's next paycheck.
If the applicant has a job, these loans are intended to be fast and typically simple to apply for.
The term "payday loan" was coined to describe how they may assist customers in obtaining some fast cash to tide them over until their next paycheck.
Payday loans are also known as cash advance loans, post-dated check loans, cash advance loans, and loans against future deposits.
Minimum Conditions for Payday Loans
The Consumer Financial Protection Bureau (CFPB) government claims that the most common requirements for consumers to be approved for a loan from payday lenders are as follows:
- age of at least eighteen;
- possess a functioning checking account; and
- Bring a valid form of identification and some evidence of your income.
As little as 15 minutes might pass before the loan is granted.
The lender often receives a check from the borrower for the loan amount plus a charge and hangs onto the check until the debt is due.
Most payday loans are only good for a few weeks. When the loan is due, the borrower has two options: either they repay the debt in full or they let the lender cash the post-dated check or make another withdrawal from their account.
New CFPB regulations
The CFPB published a final rule on July 7, 2020, which repeals a 2017 Obama administration rule requiring payday lenders to determine a borrower's capacity to repay a loan but leaves in place a provision limiting the number of times payday lenders can attempt to deduct money from a borrower's bank account.
Interest rates for payday loans
Loan criteria shouldn't be the only factor taken into account by those considering a payday loan.
Payday loans sometimes have annual percentage rates that are 500% or even 1,000% or more.
Payday loans are still a costly choice and need to be used carefully even when business models and laws place restrictions on their size and length.
Payday loans have the highest borrowing costs due to their high-interest rates.
While some jurisdictions, like New York, have rules limiting the amount that payday lenders may lend and the fees they can charge, other states do not allow the practice of payday lending at all.
Lenders sometimes work with banks in other jurisdictions to circumvent restrictions in those places where the activity is outlawed.
Cash Advance Amounts
The maximum loan amounts for payday loans are generally set by state law, however, qualifying loan amounts might vary based on the borrower's income and the payday lender.
To prevent people from taking out big loans with exorbitant interest rates, several jurisdictions even restrict the number of payday loans a borrower may have open at once. Depending on state legislation, loan amounts might range from $50 to $1,000.
Should I apply for an instalment loan from Money Mart or a payday loan?
Borrowers that want flexible qualifying conditions may access both (but at a price of higher rates). Make sure you will have enough money left over to cover your other obligations and payments when you get a payday loan so you can return it on time. Otherwise, you can find yourself taking out another payday loan to fill the deficit.
If you choose one of the Money Mart instalment loans in the aforementioned example, you will pay a higher interest rate but your loan will be repaid over the course of 12 instalments.
When choosing between these 2 loan options, consider whether you would find it easier to make 12 or smaller instalments or a single, sizable payment (with enough income left for other expenses).