debtcare.ca

Tag: payday loans

  • Where To Get Online Debt Help — Payday Lenders Are NOT The Answer!

    During the COVID-19 pandemic, many Canadians have lost their jobs or are receiving reduced income.

    But while incomes have declined, debt payments haven’t necessarily done the same.

    Some lenders offered loan deferrals, but it’s important to note that deferrals aren’t forgiveness. What this means is that you will have to pay those debts eventually — and it may come with extra costs, such as interest for the deferral period.

    And not all lenders have even offered these deferrals. Some may expect you to keep making your payments throughout the COVID-19 pandemic, plus your other bills, like housing and utilities.

    If you’re in this boat, you might need help to get out of debt.

    The Problem with Payday Loans

    Payday loans should be avoided completely if you want to get out of debt.

    The simple truth is that payday loans rarely (if ever) actually improve your finances. This is because:

    • They’re short-term. They need to be repaid within 14 to 62 days.
    • They come with sky-high interest rates. Payday lenders often charge an annual interest rate of between 391% and 652%!

    The worst part is that payday loans trap you into a vicious cycle that creates more debt.

    Take this scenario:

    • You take out an advance on your paycheque for $750, plus fees and interest.
    • That money must be paid back within three weeks, or 21 days.
    • You receive your next paycheque, but your other bills have come due and you need the pay to pay for those obligations.
    • You’re unable to pay back the payday loan – what do you do?

    For most people, the answer is take to out another payday loan, which creates an unending cycle of paying off debt with more debt.

    During the COVID-19 pandemic, payday loans are even more unsustainable. If your income has been affected, you may not have another paycheque to find the funds, or you could be dipping into emergency help benefits, such as CERB payments.

    Where to Get Online Debt Help During the COVID-19 Pandemic

    There are other options to get out of debt besides payday loans.

    You might consider:

    • Budget management.
    • Financial restructuring or debt consolidation.
    • Settling outstanding debts.
    • Refinancing your mortgage.
    • Special programs (such as the access DebtCare Canada provides to a program that can resolve a CRA back tax problem).
    • Filing for insolvency – bankruptcy or a consumer proposal.
    • And more.

    The exact options will depend on your situation. At DebtCare Canada, our consultants look at your whole financial picture to find the best solution for you.

    During COVID-19, you’ll need to get online debt help to maintain physical distancing. DebtCare has been able to operate 100% remotely since the start of the pandemic. You can book a free consultation by:

    • Calling 1-888-890-0888
    • Texting “HELP” to 1-888-890-0888
    • Visiting debtcare.ca/

  • 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.

     

  • 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.

  • 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.