According to a recent article, Borden’s story was brought to light thanks to a lender’s predatory behaviours which seemingly took advantage of the single mom. According to the article, thanks to her credit history, “Borden couldn’t qualify for a line of credit from a bank, which typically charges less than 10 per cent interest. She was forced to turn to the alternative lending market, where lenders operate outside of regulated financial institutions. She settled for a 28.99 per cent interest rate.”
This eventually resulted in Borden paying $25,000 on a subprime, $10,000 loan, at which point she said enough was enough and decided to fight back. Read all about her story here: http://www.huffingtonpost.ca/2015/07/31/predatory-lending-canada_n_7898598.html.
Unfortunately, Borden’s situation is not uncommon. Lenders price to risk, and this means that once there is more risk, rates go through the roof. So what happens when your financial obligations become too tough to handle and you think a loan is the only way to regain control?
As Borden and the thousands of others like her have learned, borrowing your way into more debt and higher interest credit products until you pop is not the best way to deal with debt.
Strong initial signs that you are running into credit problems:
- You are making only the minimum monthly payments to your credit cards
- You are getting payday loans to avoid having your credit pulled and to make ends meet
- You owe more debt than you could reasonable afford to pay in full within 4 yearsFiling a consumer proposal is a viable option for dealing with debt now – you don’t have to wait until everything is in default and collectors are harassing and humiliating you. It also has the added benefit of halting any enforcement action that has already been levied against you, and puts a stop to sky high interest.
As the article notes, predatory lending will not go away. The government has regulations in place, but they don’t make interest illegal until it reaches 60% and payday loans can charge up to a 21% fee to borrow for only 2 weeks. As long as there are people who are vulnerable because they have had financial problems and have fewer options, these lenders will continue to gouge consumers who believe they have no other options.
Filing a consumer proposal is an important debt relief option to consider when it comes to getting a fresh financial start. If your credit is making it hard to find relief, and you find even paycheque to paycheque living has become difficult, a consumer proposal may just prove to be your best bet.
To find out more about how filing a consumer proposal can help you rebuild, call DebtCare Canada today at 1-888-890-0888.