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Understanding Payday Loans and How to Get Rid of Them in Southern Ontario

A payday loan is a small amount of money that is lent at a high rate of interest, with the agreement that it will be repaid when the borrower gets their next paycheque. These can be helpful in a pinch when you need money fast for something important, but can also get you into debt trouble very easily if you aren’t able to pay it back right away. In cases such as those when you need debt help in Toronto, turn to Harris & Partners Inc.

There are many places that offer payday loans all over Ontario. Money Mart, Money Tree, Stop N Cash, and many others make it incredibly easy to get money you need fast. It’s the equivalent of getting your paycheque early and the repayment period is based on how often you get paid. You will be expected to show proof of employment and a bank statement. You will then write a post-dated cheque for the amount of the loan plus any fees and interest. On the date that the loan comes due, you will be required to go into the lending store to pay it off. If you are not able, then the company can simply directly deposit the cheque. In the event that you need more time to pay it off, it might be possible to get an extension, though that will involve additional fees.


Payday Loans May Lead to More Debt

The dangers in getting a payday loan come from the fact that the fees on top of the loan can be anywhere from 15% to 30%, meaning it is comparable to getting a yearly loan with a rate of nearly 800%. As you might imagine, this can land someone in debt trouble very quickly if you aren’t able to pay it off or if you keep taking out payday loans. When you are already experiencing financial hardship, taking out a payday loan can just make things worse, especially when you find yourself unable to pay the loan, leading to more fees and charges or you can pay the loan, but then cannot cover other expenses so you need to take out another loan. There is no limit on how many times a person can take out a loan, so you can just keep going back, leading to a terrible debt spiral.


Seek Debt Help from a Licensed Insolvency Trustee

When you need debt help in Ontario to get out of the hole that a payday loan can put you in, enlisting the aid of a Licensed Insolvency Trustee is a good way to help. We can help you choose the right option for you and your situation. 


Filing for bankruptcy may seem like a scary prospect, but it can help you cancel your debts while you rebuild your credit. We will make sure to file the correct paperwork, including filing taxes and contacting any creditors you have. An alternative option is to file a consumer proposal, depending on your assets and financial situation. Contact Harris & Partners Inc. so we can discuss the options that would best most applicable to you.

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