When you need money, you might consider payday loans.
Payday loans are advertised as a great and easy way to borrow money when you need some just to tide you over, but they can be very dangerous.
You may take out a payday loan with the best of intentions, only to fall short on your payments and end up in massive debt – and it can happen very quickly.
Perhaps you need funds to pay a bill, or even just to make sure you have enough to take you over to your next payday.
Whatever your reasons for thinking of taking out a payday loan, you might be better off if you reconsider.
While these loans are convenient and do not require a credit check, they can leave you in huge amounts of debt because of how much the interest accumulates.
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Rates are high, and the longer you take to pay the money back, the more owe.
Plus, if you don’t pay it back at the agreed time, you will accumulate even more fees.
These types of loans always cause more issues than they solve.
Paying $20 to borrow $100 for two weeks might not seem so steep, but that’s a rate of 520% annually.
A credit card may have a rate of 20% annually, so you can easily see how the debt racks up quickly.
Many people do, of course, believe they’ll be able to pay back the money in just a few short weeks.
They do have the best of intentions, but the truth is, if you don’t have an emergency fund or savings to tide you over, you’re probably going to end up in hot water doing this sooner or later.
Solving the root of your problem rather than trying to take out a payday loan as a sort of band aid solution will be much better for you in the long run.
Your Alternatives To Payday Loans
You could take out a credit card as an alternative to a payday loan, but you can still get into substantial amounts of debt if you use the card for things you really don’t need, rather than emergencies only.
Having a plan to keep the balance low and pay it off every month will improve your credit.
That being said, if you still don’t have savings, you’re setting yourself up for failure.
The best thing you can do is come up with a budget you can realistically stick to so that you have enough for bills, essentials such as food, savings, and even the occasional treat.
This way, you won’t feel like you’re missing out.
Get In Touch With Bankruptcy Canada Today
If you’re already in hot water with payday loans or even credit cards, get in touch with Bankruptcy Canada today.
We can help you on your way to financial stability, and give you the tools needed to stay out of debt for good.
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?