What You Need to Know About Payday Loans Scarborough
What are payday loans in Scarborough? This is a type of loan that you can take advantage of if you are short of cash in between paycheques. Yet, payday loans can be incredibly expensive as creditors will charge you with high-interest rates, especially if you are not able to pay it on time. The loan has a value of up to $1,500.
You have to return the money you borrowed within 62 days if you are located in Alberta, Ontario, Manitoba, British Columbia, and New Brunswick. Remember to make payments on time if you do not want to increase the value of your debt.
Even though payday loans are considered as a convenient and immediate source of money, they are not recommended to be used for paying rent, buying groceries, or paying for your monthly utility bills. Remember to use it for emergencies only. You can visit companies that offer this loan service in-store. It is also available online. However, getting it online involves some risk in such a way that you might end up with scammers or those payday lenders without licenses. In this case, you can check with your local consumer affairs office for verification.
Are you considering applying for a payday loan? Here are the things that you need to know.
You need to provide personal details. Your lender will require you to fill out a form for you to provide the details about your income, address as well as bank account information. This will enable the loan company to get or withdraw the total amount of borrowed money from your bank account. This is also termed as a pre-authorized debit. Another way is to give a post-dated cheque. Remember to be extra wary when giving your financial information. Your lenders will have access to your account. Look for credible and trustworthy companies that offer payday loan services.
Getting the loan and paying it back. There are two options to get the money. Most of the time, the money will be deposited to your account or will be given to you in cash. Sometimes, you can opt to have a prepaid card where you can withdraw the money but it will require additional charges for activation and use. In most cases, the money will be paid in the location where you applied for the loan. The process will include signing an agreement where important particulars like costs, extra fees, and due dates will be written. Always make sure that you fully comprehend what is stipulated in the agreement and if all the details are correct. You can also ask the lender in case there are things that you do not understand. Contact your local consumer protection office for the list of payday lending policies.
Payday loan costs. As opposed to other methods of borrowing money, payday loan costs a lot more. What are the reasons? You will be obligated to pay high-interest rates which can go up to 500% to 600%. In case that you will fail to may the payment on your due date, you will be charged with penalties and more interest fees. This makes repayments too difficult to make and can add to your financial burden. This is what you need to consider when applying for a payday loan because you can be caught up with overwhelming debt.
Discuss the loan with your lender carefully. Again, you need to know all of the fees included in the loan, as well as the maximum cost of charges. You can also clarify the penalty fees that will be enforced if you are not able to pay. Payday loans have a “cooling-off period” where you can cancel the loan within two days without consequences. Make sure this is included in your written agreement.
What will happen if you are not able to pay on your due date?
This kind of loan entails a lot of consequences if left unpaid which may comprise of:
- A fee is charged when a pre-authorized debit will not go through because your bank account does not have enough money to pay for the loan. The fee can range from $20 to $50.
- Your interest rates and total debt will keep on piling up.
- Your lender might contact you persistently to collect the payment. They can also call your friends, family, and workplace.
- The payday loan company might coordinate with a collection agency. This will have a negative effect on your credit history and credit report.
- If no payments had been made for a long period, your lender can sue you.
- You are at risk of losing your assets to pay your debt.
- A portion of your salary will be taken to make repayments (also known as wage garnishing)
Payday loans are not the only option to get through your financial problem. Take a look at the following alternatives.
Depositing cheques. When depositing cheques, the bank will let you have the first $100. The government has also increased the cashing limit to $2000 for emergency purposes. You can cash in your cheques for free in any bank in Canada.
Negotiate with your lenders. Contact your creditors if they can give you more time to pay. Make use of your post-dated cheque. Know how to deal with your lenders.
Make use of other ways to get money immediately. For instance, you can ask your employer for an advance payment. Think about borrowing money from your relatives and friends instead. A personal loan also works better than payday loans. Applying for a line of credit is also cheaper. Cash withdrawals through credit cards have much lower interest rates.
Do you feel like you are trapped in a never-ending loop of financial problems?
It might be the best time to acquire for the assistance of a financial advisor, credit counsellor, or a Licensed Insolvency Trustee. Applying for a payday loan is a major decision that can lead to drastic financial consequences. Moreover, financial professionals will be able to advise you on what to do as an alternative solution to resolve your debt problems.
Richard Killen and Associates, a Licensed Insolvency Trustee, can help you understand more about Payday Loans Scarborough and other debt-relief solutions.