Payday Loan Debt in Guelph, ON
Payday loans are seen by many people as a viable way to manage short-term cash flow issues.
If you run out of money halfway through the month, for example, obtaining a payday loan might seem like a suitable way of replenishing your funds until you receive your wages.
However, payday loans are notorious for the high interest rates that they charge.
Even borrowing a relatively small amount over a short time frame can mean that you’re required to pay back substantially more.
In addition to this, extending the loan or missing a payment typically means a higher interest rate and extra charges will be added to the amount you owe.
Due to this, debt can quickly spiral when you rely on payday loans to help you manage your finances.
As a result, many people require payday loan help in Guelph and other areas throughout Canada.
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Although there has been an attempt to increase awareness of the problems associated with payday loans, a considerable number of people in Canada continue to borrow from payday lenders.
Of course, no-one wants to borrow funds with a high-interest rate.
Despite this, a substantial number of Canadians feel forced into taking out payday loans in order to pay for essential costs, such as food or utility bills.
In addition to this, some people rely on payday loans in order to make repayments on other, standard debts in an attempt to avoid damaging their credit rating or attracting financial penalties.
Are Payday Loans Worse Than Everyday Debts?
Although many people assume that payday loans are the same as everyday consumer debts, this is rarely the case.
‘Standard consumer debt’, such as a credit card or loan from a high street bank, have variable interest rates and some might be fairly high.
However, standard credit cards and loans rarely have interest rates that are anywhere near as high as payday loans.
In the U.S., the average rate of interest on a standard credit card is 20.15% APR and, in Canada, this figure drops to around 19% APR.
For people with bad credit, you may pay a little more interest on a standard credit, with rates routinely going up to around 29% APR.
In contrast, payday lenders often charge interest rates of up to 60% APR are commonplace.
In Canada, it’s a criminal offence to charge interest of more than 60% but there is a caveat to this.
If the province governs the rate, then the 60% cap doesn’t apply.
Effectively, this means payday lenders are routinely charging interest rates that are equivalent to 500% APR or higher.
In 2018, Ontario introduced caps on how much payday loan providers can charge.
Currently, you can’t be charged more than $15 for every $100 you borrow, and lenders cannot offer you more than 50% of your net income in one loan amount.
Even with these restrictions, however, the cost of taking out a payday loan is substantially higher than obtaining credit from standard lenders, which means people in Guelph and the surrounding areas often experience debt problems when they rely on payday loans.
Managing Payday Loan Debt
If you have payday loans, you may be worried about your ability to repay them in accordance with the terms of your agreement.
Although Ontario has introduced relatively strict rules regarding the payday loan industry, they can seem complicated and hard to understand.
Due to this, you may find it helpful to seek advice from a trusted source, such as a licensed insolvency trustee (LIT).
Due to the high interest rates applied to payday loans, they’re not a first-choice option for most people.
This means that, if you’re experiencing debt problems with payday loans, you probably have a substantial amount of standard consumer debt too.
Often, it is spiralling payday loan debt that is an individual’s last attempt to try and resolve their financial problems without assistance.
Fortunately, you no longer need to struggle alone.
If you need Guelph payday loan help or you’re worried about other types of debt, there are plenty of options available to you.
Although facing up to financial issues can seem daunting, finally resolving your money worries will give you a new lease of life and enable you to look forward to a brighter future.
When it comes to debt management, there isn’t a one-size-fits-all solution.
Some people can come to workable agreements with their creditors and pay back a smaller amount each month while interest is suspended, for example.
Often, however, a formal approach is required to resolve spiralling debt problems.
If so, filing for bankruptcy or making a consumer proposal could be a viable way to eliminate your debt and move forward with your life.
Can You File for Bankruptcy if You Have Payday Loans?
Filing for bankruptcy or making a consumer proposal can mean that your payday loan debt is eradicated or greatly reduced, along with other types of debts.
While a consumer proposal will significantly reduce your debts, you will still need to continue making a monthly payment towards them.
In the case of bankruptcy, however, your debts are eliminated, and you no longer need to make any repayments towards them.
Remember – bankruptcy doesn’t just apply to payday loans.
If you have standard consumer debt, like credit cards and loans, or even government-related debt, like student loans or unpaid taxes, these could be included too.
Get Payday Loan Help in Guelph Now
If you’ve been struggling to manage your debts, you can talk to someone in confidence right now.
Whether you need payday loan help in Guelph, or you simply want to find out more about resolving everyday consumer debt, we’re on hand to provide the advice and assistance you need.
Simply call Bankruptcy Canada on (877)879-4770 and speak to a licensed insolvency trustee about your financial situation today.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?