Payday Loan Debt in Nunavut
At first glance, a Nunavut payday loan can seem like a smart choice.
This will be particularly true if you have bills that need to be paid and that you can’t afford with your paycheck.
It’s possible that you will be focused on protecting your credit rating by ensuring that these unpaid bills don’t haunt you.
It’s at this point that you might discover a payday loan company, offering you money fast, potentially even on the same day that you apply.
You can borrow a lot of money too and it’s possible to borrow thousands through the business.
Crucially, they may not even care that you have a poor credit rating.
But, if you do choose to take on a payday loan, you might find that it’s far more trouble than it’s actually worth.
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Payday Loans Explained
What is a Nunavut payday loan?
Sometimes referred to as a short term loan a payday loan is a loan from a creditor that is supposed to be paid back with your next paycheck.
There are lots of ways to utilize a payday loan.
However, most people take them out when they have an emergency situation.
For instance, you might need to repair your damaged car or pay the bills that are hanging over your head.
Perhaps you have an expensive cost that you simply weren’t expecting.
A payday loan seems to be ideally suited for this type of scenario.
How Do Payday Loans Hurt You?
You might think that if you can pay the payday loan back on time then there won’t be an issue.
This could be the case but the problem is that these loans come with ridiculously high rates of interest.
Indeed, the rates can soar over 600% which is what makes them so dangerous.
With this level of interest even a slight delay in paying back the loan will cost you a fortune.
This can lead you into a situation where you are constantly building up more and more debt.
You can easily reach the point where one payday loan can leave you with a crippling level of debt.
Some people believe that a Nunavut payday loan is safe if you carefully work out how much you need to pay back.
This can be useful as long as you take all the costs into account.
This extends beyond the interest because it’s quite common for a payday loan to have hidden fees.
So, it’s possible that you are unable to pay the money back with your paycheck and that leaves you in the dangerous situation where debt builds.
Since you will then be left owing a lot of money it can damage your credit score.
Remember, your original goal of the loan could have been to protect that rating.
Avoiding A Payday Loan
People often turn to a payday loan as a solution not because they want to but because they are desperate.
They often believe that they have exhausted all alternative options.
However, this isn’t the case.
You can be proactive about avoiding this situation completely.
One of the ways to do this will be by saving money.
If you save money, then you should have the cushion of cash that you need to handle additional bills.
Alternatively, if you do have a strong credit rating, then you can explore other alternative lending options such as from a bank or a credit union.
This can be beneficial if you are trying to use a payday loan to wipe out an existing debt.
You should never do this because the high level of interest will always leave you in a weaker position overall.
Alternatives To Dealing With Debt
If you are dealing with debt, then you could turn to a payday loan as a solution.
But it’s important to be aware of the alternatives that are available to you here.
For instance, you could explore debt consolidation.
Debt consolidation in Nunavut is beneficial if you have multiple debts from different lenders.
You can consolidate the cost into another loan and gain access to an interest rate that is far more beneficial for you.
This is going to make the debt more manageable in the long term.
Alternatively, you can explore a consumer proposal.
Here, you file an offer that is reviewed by your creditors based on how much debt you can afford to pay.
Creditors will either approve or reject this offer.
If the offer is approved then you will work on a set plan to clear your debt within a fixed period.
This is another way to ensure that you can get your debt back under control.
In some cases, you may also be able to offer a creditor a lump payment that clears the debt.
It all depends on your individual financial situation.
You might even want to explore financial counselling.
Financial counselling in Nunavut is based on exploring your personal financial situation and working out exactly how much you owe as well as how much you can pay back.
A licensed professional will work to get your creditors on board with a financial plan that makes your debt far more manageable.
They will also help you plan out a budget so that you will be able to pay the debt off over time.
They can even provide steps to ensure that you don’t end up in this situation again in the future.
Get Help Now
Are you still confused about payday loans?
Perhaps you are already struggling with a high level of debt caused by relying on a payday loan.
If so, then we can help.
If you fill out an evaluation form our expert advisors will get back to you as quickly as possible and discover the right way to proceed.
This will be based on your individual finances.
We have helped countless Canadians in Nunavut escape their debt and we are confident that we can help you too.
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?