Payday Loan Debt
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Put paid to your payday loans
A payday loan is a small amount of money that you borrow at a high rate of interest, with the agreement that it will be fully repaid when you get your next paycheque. Such a loan can be helpful in a pinch when you need money fast for something important or unforeseen.
The amount of paperwork you’ll be expected to complete is deliberately kept to a minimum, and the money can be made available very quickly, and often straight away after the formalities have all been completed.
Be wary, as you can also get yourself into debt trouble very easily if you aren’t able to pay even small cash loans back exactly when they are due.
This is because you will find that your payday lender will add heavy extra charges on top of your outstanding debt, which will also need to be paid back, with interest.
Making a late payment might also hamper your chances of keeping your finances on the right track, as again, payday loans carry heavy penalties in such situations.
If you find yourself having difficulties with payday loans and interest rates, are wrestling with money problems caused by them, and you need debt help in Toronto, turn to Harris & Partners Inc.
How do payday loans work?
There are many places that offer payday loans all over Canada. Money Mart, Money Tree, Stop N Cash, and many others make it incredibly easy to get more money when you need it fast, without the need to go through credit checks.
It’s the equivalent of getting your paycheck early, and the repayment period for a payday loan is based on how often you get paid. You will be expected to show proof of your employment status and a bank statement, but such payday loans usually need no other proof of income, and the formalities are deliberately kept to a minimum.
Once your payday loan has been set up, you will then write a post-dated check 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 lender’s store to pay it off. If you are not able to do this, then the company can simply directly deposit the check.
In the event that you need more time to pay off your payday loan, it might be possible to get an extension, but that will incur additional fees. Again, these will be added to the amount of the outstanding loan.
Payday loans may lead to more debt
The dangers in getting a payday loan stem from the fact that the hidden fees added to the loan can amount to between 15% and 30% of the amount of money you borrow, meaning it is comparable to getting a yearly loan with a rate of nearly 800%.
As you might imagine, this can land you in debt trouble very quickly if you aren’t then able to pay it off, or if you take out multiple loans or use a number of different payday lenders.
When you are already experiencing financial hardship, taking out a payday loan can just make things worse, especially if you find yourself unable to pay the loan, as this then leads to more fees and charges being added to the debt. Or you may be able to pay the loan, but then cannot cover other expenses, and so you have to resort to taking out another loan.
There is no limit on how many times a person can take out a loan, so you could find yourself keeping going back and with a number of small loans needing to be paid, leading to a terrible debt spiral, and a feeling that your finances have run out of control.
Get rid of payday loan debt - seek debt help from a licensed insolvency trustee
When you need debt help to get out of the hole that a payday loan or loan fees can put you in, enlisting the aid of a Licensed Insolvency Trustee is a good way to start to deal with your situation. We can help you choose the right option for you and your circumstances, possibly involving flexible repayments.
Filing for bankruptcy may seem like a scary prospect, but it can help you cancel your debts and give you a platform to help you rebuild your credit. When you contact Harris & Partners with such a financial difficulty, 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, which will take account of your assets and financial situation. Contact Harris & Partners Inc. so we can discuss the options that would be best suited to you.