A payday loan (also called a cash advance) is a small, short-term unsecured loan that is tied to your pay cheque. You may have seen these Pay Day Loan shops on street corners; their signs enticing us with promises of low-interest, short-term credit.
But pay day loans usually turn out to be anything but low-interest OR short-term. They are the loan of last resort (where we go when all other loan sources, such as banks, friends and family, have turned us down).
A survey conducted by Ernst & Young LLP on behalf of the Government of Ontario determined that for every $100 loaned, the total cost is approximately $21.50. Therefore, for a loan of $304 with a two-week term, the total cost would be $65.36 (on top of the $304 borrowed). You can see that this type of loan can be really expensive really quickly.
Once caught in the web of pay day loan repayment, a borrower will often find themselves heading to a second or a third payday loan store to borrow funds to cover the growing debt on the first pay day loan – with often disastrous financial results.
Payday Loans are the worst form of revolving credit, and are hopelessly unaffordable for most people. The best way to deal with a payday loan is not to use one at all.
But if you’re already caught up in this hopeless cycle, talk to us today by calling (844) 507-7526 or book a free initial consultation online, to rid yourself of your payday loan nightmare once and for all. We CAN help you.