Payday loan lenders help people who have financial problems fall deeper into financial turbulence by offering these expensive short-term loans with virtually no credit approval process.
Looking at the current economic collapse in the US, it is clear that one of the root causes are lenders who are granting loans to individuals who don’t qualify. This has led to a massive credit crisis.
More often than not, consumers who get caught in the payday loan cycle experience a credit crisis of their own. Payday loans are granted to individuals who can provide a paystub to prove that they are gainfully employed. That is the only pre-requisite.
In many cases, if approved, the consumer can borrow up to 100% of the amount of their pay. This amount has to be repaid in full on their next pay period in addition to a large fee (often 20%-25% of the loan amount). Many times consumers who are caught in the payday loan cycle will go to multiple payday loan providers, taking out multiple loans. Payday loan companies will continue to lend them money, willfully ignoring this information.
If you continue to roll over your loan for a few months, you will implode financially. In spite of this, the payday loan company will still make a massive profit from you, even if you default on the final “roll over” or “loan”.
This disturbing trend is what took place in the US and is quickly becoming an epidemic in this country, affecting thousands of Canadians. Despite being a regulated industry, payday loan companies are still doing little to prevent individuals from taking out multiple payday loans at one time. Nor are they reducing the amount that they lend or their fees. Instead they continue to profit and thrive on the backs of hard working Canadians.
If you are in the cycle you must break it, before it breaks your finances. It is a scary position to be in because you can anticipate that if you can’t pay, the payday loan company will send you to collections or call your employer, causing humiliation. They will do exactly that, if you simply default.
The best thing to do is have a plan. There are a number of programs that have been made available by the Federal Government to protect people that are suffering due to payday loan debt. These programs protect you and your privacy. They stop the payday loan companies before they have a chance to alert your employer, embarrassing you at work.
There are solutions; you just have to reach out and seize them. For more information about how you can get rid of your payday loans visit http://www.debtcare.ca/