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Tag: payday loan

  • More Regulations Needed for Payday Loan Companies

    You see them on almost every street, in every strip mall, and all over the internet. You hear about them on the radio and see their commercials on television all the time. Payday loan companies are, despite the constant bad press, booming in Canada. While they claim to help those who think they have very few financial options, what they are actually doing is making that individual’s financial situation worse!

    Payday loans are dangerous – there is no doubt about it.

    A payday loan is a short-term, high-interest loan that’s advertised as a convenient option to make up a financial shortfall between paycheques. However, what they don’t advertise is that, when you take out a payday loan, you usually end up getting more pain than you bargained for.

    Various news outlets have continued to warn consumers about the dangers of payday loans and push for change within the industry, and the changes are starting to come.

    According to the Toronto Star, back in January the Ontario government made moves to help consumers being preyed upon by payday lenders. New regulations “lowered the cost of a payday loan from $21 to $18 charged on a $100 loan.” However, as noted, “while an $18 fee on $100 of borrowed money may seem like a manageable sum, when annualized the interest rates these payday lenders are charging is 469 per cent.”

    The city of Hamilton has also stepped up, becoming the first region in Ontario to regulate payday lenders in a major way. Now, payday loan companies in Hamilton are required to “pay a licensing fee, post the annualized interest rates they are charging (compared to the chartered bank’s rate of interest), and require staff at payday loan outlets to provide city-sanctioned information on credit counselling services.”

    These are definitely steps in the right direction. Still, those fees and interest rates can quickly add up, making repayment very difficult.

    If you’re one of the thousands of Canadians currently trying to figure out a way to climb out of a hole created by a continuous renewal of a payday loan, we can help. Stop struggling. We can sit down with you and work out a strategy to get those payday loans off the table and help you create a budget to better meet your monthly financial obligations.

    At DebtCare, your financial success is our goal – and that means eliminating the need for and the issues caused by payday loans.

    Get in touch with us today by calling 1 (888) 890-0888.

    Source: Toronto Star, “Time for Ontario to ban predatory payday loan operators: Opinion,” https://www.thestar.com/opinion/commentary/2017/03/03/time-for-ontario-to-ban-predatory-payday-loan-operators-opinion.html.

     

  • In the News: Google to Ban Payday Loan Advertising

    debt2We’ve all heard the ads on the radio and seen the signs. Get money, fast, without a credit check. Payday loan companies are all over the place and people often see them as a quick fix for financial troubles – but buyer beware – payday loans are hazardous. They are probably one of the highest interest credit products out there!

    Not only are they problematic because of high interest rates, they can become incredibly difficult to pay off. If you can’t pay off the loan with your next paycheque, the situation can quickly snowball, leading to fees which quickly surpass the initial amount of the loan.

    Payday loans have become so troublesome that even Google is taking a stand, and a recent Global News report explains why: http://globalnews.ca/news/2697070/google-is-banning-payday-loan-ads/.

    According to the article, Google is making a move that “could have as much or even more impact on curtailing the industry than any move by politicians, as many payday loans start with a desperate person searching online for ways to make ends meet or cover an emergency.” Since most of a payday loan company’s business comes from online searches, that business may just decline a significant amount!

    As the search engine has done with several other categories, including counterfeit goods, hate speech, and tobacco products, effective July 13, Google will be banning all ads for loans due within 60 days and will also ban ads for loans with interest rates 36% or higher.

    If you currently have or have had payday loans and are reading this, then you probably agree that this is a step in the right direction! By not giving payday loan companies the chance to prey on the vulnerable, Google is doing their part to protect your financial future.

    If you are already in over your head with payday loans, DebtCare has solutions, no matter your situation.

    Stop stressing and regain control. Call us today at 1-888-890-0888.

     

  • More Money, More Problems? The Danger with Payday Loans

    payday loansIt is becoming far more common these days to hear advertisements on the radio, or see gigantic signs when driving down the street, for relief from financial woes in the form of payday loans. These “convenient”, and we use that term very loosely, almost immediate loans claim to offer that extra money to get you through until the next payday – some even use the excuse to treat yourself as a reason to obtain one. So, does more money really equal more problems?

    Are you thinking of getting a payday loan to tide you over for a bit – or even to treat yourself? Wait – these seemingly innocent fast-cash solutions come with their own host of problems, and if you are not aware of the risk you can easily get in over your head – and rather quickly!

    First, payday loans are not free – obviously. When a company offers you fast cash, $100 for $20 for example, you might think that this $20 is worth the extra cash in hand at this moment. So you head into the business, provide your paystub and walk out with your loan. The fact that no credit report is required should be a major red flag!! This is definitely one of those times when “sounds too good to be true” really does ring true.

    What if that $100 though just doesn’t seem to cut it and instead you are thinking $1000 would be that much better? Now you are talking about a $200 cost – that is a 20% fee to borrow money for sometimes as short a period as two weeks. And borrower beware – 20% here is just an example, as some places will charge far more!

    Worse than the fees is the jam you find yourself in when, at the end of the month, you are yet again strapped for cash and can’t pay that payday loan in full. Think about it; if you didn’t have the cash at the beginning of the month, what makes you think you’ll have it at the end? Can’t pay it back in full? Now you are looking at another $200 in interest plus a fee for the extension.

    When broken down, it is clear that payday loans are a prime example of fool’s gold – money that never actually belongs to you and just ends up costing you dearly in the end. Know the dangers before you head into that establishment and perhaps consider some other avenue.

    For more about the dangers of payday loans, or for help dealing with a revolving payday loan you can’t seem to shake, please call DebtCare Canada today at 1-888-890-0888.

  • Fast Cash = Big Problems: The Notorious Payday Loan

    Payday LoanIt seems as though payday loans are becoming alarmingly more prevalent for many individuals looking for a quick financial fix. But borrower beware: if you are considering a payday loan to help with some upcoming bills, or to make a big-budget purchase, you might want to think again.

    There has been a great deal in the news lately, and for good reason, regarding the actual borrowing consequences for payday loans. Sure, $100 for $20, as their advertisements typically claim, may sound like an okay deal, but in the long term, these loans are far too often much more costly than they initially appear to be. Payday lenders are actually quite infamous for their sky-high interest rates, thus their propensity for sending borrowers into a self-destructive cycle of debt that can be incredibly hard to get out of.

    Here is an example of why: It is the end of the month, and payday is not for another week, but you find yourself strapped for cash with a few bills still outstanding and no way to cover them. Looking for some fast cash, you head to a payday loan centre and leave with $1000 in about 15 minutes, after agreeing to terms of $20/$100 (so about $200 to cover the entire loan). Time goes by, and everything seems good at the end of the month, but then you realize you are on the hook for that cash. If you were strapped last month, the chances are quite high that things will be the same again this month. That means re-borrowing the money, and again paying that $200, and again being on the hook at the end of the month.

    See the problem? The cycle is one that far too many people find themselves stuck in repeatedly, and without additional funds, can’t get out of. If you have been considering just how attractive these easy-to-get loans seem to be, you might also want to seriously consider, firstly, why they are so easy to get, and secondly, what the long term impacts are if you are not 100% certain you’ll be able to pay them back in a short period of time.

    So what are your options if you are already stuck in the revolving payday loan of your nightmares? Well, you have a few options. If a payday loan is just one of your financial worries, and is more like the proverbial cherry on top of your rotten debt sundae, you might think about the benefits of a consumer proposal or bankruptcy. And, since a payday loan is a form of unsecured debt, it is often included in a bankruptcy or consumer proposal.

    For more about how bad payday loans actually are, or for other debt help, DebtCare Canada is here to help you. Contact us today by calling 1-888-890-0888.

  • CBC News Report: Payday Loan Interest

    Payday LoanAs a debt solutions organization, we often have clients come in and talk about problematic payday loans and how they continue to struggle with meeting the repayment requirements. When it comes to payday loans, we always try and suggest other forms of financial relief – and a recent CBC News report demonstrates clearly why we might do so.

    The report, released earlier this year, examines the case of a B.C. payday lender who was ordered to repay over $1 million to customers after charging up to 35% interest.

    By law, payday loan lenders cannot charge more than 23% interest per month. And sure, this may seem like a fair deal, the existence of a cap on how much lenders can charge, but 23% is still a whopper when it comes to the end amount that you are paying to borrow a few hundred dollars!

    Check out the full article here: http://ca.finance.yahoo.com/news/cash-store-ordered-pay-1m-illegal-payday-loans-152335287.html

    Payday loans are never a good idea, and should be avoided at all costs – not only because of the exorbitant interest rates, but also because they become increasingly difficult to pay off.

    Don’t let a payday loan interest cap fool you – there are many other options as far as financial relief. Contact DebtCare Canada today for more information: 1-888-890-0888.

  • The Truth About Canadian Payday Loans

    Canadian payday loans are a controversial topic and while they are now regulated in Ontario they still continue to be the reason that many consumers run into severe financial problems.

    Canadian payday loans are a type of credit product that is very easy to get. Whether you have good credit or bad credit, if you are employed with a paystub you can get a payday loan. Canadian payday loan companies will not pull your credit report and the loan is granted based on your income. Payday loans are short term loans that have to be repaid in full from the first paycheque that the client receives after receiving the payday loan.

    Here is how Canadian payday loans work:

    1. The Canadian payday loan company will give you a loan based on your income. Some Canadian payday loan companies will lend you up to 100% of your income on a given pay period. For example, if you earn $1000 bi-weekly you can borrow up to $1000.
    2. The payday loan company will charge you to borrow the money until your next paycheque – the charge is usually large and a $1000 payday loan for 2 weeks could bear a charge of $100-$250.
    3. On your next paycheque (still following the $1000 example) you would owe $1100-$1250 even though your paycheque is only $1000.

    Many, many people find that when a payday loan comes due the loan cannot be paid in full, resulting in a default, rolling over the payday loan, or taking out another payday loan.

    If you default on Canadian payday loans, the situation can get very embarrassing very fast. The Canadian payday loan company will not hesitate to call your employer, may fax notice to your employer, may send you to collections, or worse, sue you.

    If you roll over a $1000 payday loan that costs you $150 bi-weekly to borrow, at the end of 6 months you will have paid $1300 in fees on a $1000 loan, which is more than the amount of the original loan.

    If you take out multiple payday loans you could end up owing more in fees on payday loans than you earn.

    This is a dangerous cycle, and if you are drowning in Canadian payday loans you have to break the cycle. You can get rid of Canadian payday loans but the method you use to do so will greatly depend on your personal financial situation, how many you have, whether or not you are in default and more.

    Speaking to a consultant who knows how to deal with payday loans is a sound way to get both good advice and put plan together. Once you deal with your Canadian payday loans the key is to never take them out again!

    For more information about Canadian payday loans or if you need help to get rid of Canadian payday loans please visit www.debtcare.ca or call 416-907-2582.