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If you have an emergency and can’t pay your bills, you may wonder how instant payday loans work in Ontario? They seem easy: just fill out an application and get instant cash. But before you consider this risky option, be aware of the expensive consequences.
Payday loans come with an inflated price tag and their annual percentage rate is cleverly hidden.
For example, if your loan is $300, they will charge $45 to borrow the money for 14 days which is a 391% annual percentage rate.
It is also imperative to repay the loan on time. If you’re late, the lender charges more hefty fees and interest charges. If you rollover your loan continuously, you will end up paying hundreds of dollars more than you borrowed in the first place.
A better alternative is to borrow money from friends or family. Or, take out a low-interest personal loan. If a payday loan appears to be your only choice, then you may benefit from professional help.
There are much better solutions available. Contact Adamson & Associates today for a free, no-obligation consultation so you can consider all your options. For more information call 519.310.JOHN (5646)
How Do Instant Payday Loans Work?
You’ve had an emergency expense, and can’t pay all your bills, so you might be wondering how do instant payday loans work in Ontario?
You see the ads everywhere. Payday loans, no credit check. Why not go for it?
Well, before you start googling payday loans Ontario, take a closer look.
How do instant payday loans work?
When you take out a payday loan, you complete an application that lets you borrow money instantly.
You can even find payday loans online. They are easy, convenient, and fast, but very expensive.
You do need a regular income, a bank account, and an address. But, that’s about it.
Even if your credit isn’t very good, you can probably qualify for a payday loan.
How much can you borrow?
The lender determines how much you qualify for, of course. In Ontario, payday loans are capped at 50 percent of your net pay.
In 2018, the average payday loan for Ontarians was over $1,300 and climbing.
You may be able to borrow enough to give you some breathing room. At least until you have to pay it back.
How much does it cost?
How much do you pay for all of this convenience? Payday loans come with a hefty price tag. The annual percentage rate is cleverly hidden, however.
By law, Ontario payday loan companies only have to display how much you’ll pay to borrow $300 for two weeks.
Loan = $300, $45 for 14 days, 391% annual percentage rate
Let’s say you borrow $300 and pay the maximum allowed by law: $15 per $100 borrowed. That’s $45 for 14 days.
That may not sound horrible. But it’s an annual percentage rate of 391 percent!
So there’s your answer on “how does a payday loan work.”
You must repay on time!
Here’s the most important point: Once you get a payday loan, you must meet your obligation to repay.
If you’re late, the lender will charge you a hefty fee and interest charges will continue to accumulate.
Rollover your loan continuously and you could end up paying hundreds of dollars more than you borrowed in the first place.
So is there a better alternative? Maybe something that gives you a bit more leeway if you continue having money troubles?
What are the alternatives to payday loans Canada?
You might think a cash advance would be better. But you’ll still end up paying back too much in interest.
A better alternative is to borrow money from friends and family. Or to take out a low-interest personal loan.
Recently, fintech services like KOHO (prepaid visa cards) have started to offer early payroll options, where you are able to get $100 of your payroll up to 3 days before your next paycheque – for free. Services like KOHO are always coming up with innovative solutions that can help you Budget in a Cashless Society.
But, then, if these were viable options for you, you probably wouldn’t be considering a payday loan.
Do you need financial help?
If you’re in a situation where a payday loan appears to be your best choice, you may benefit from professional help. Help that can provide a permanent solution.
And get you back on the right track financially.
If you’re having trouble paying your bills, there are much better options than a payday loan…options that don’t involve pushing your debt out to the next pay period.
Contact Adamson & Associates today for a free, no-obligation consultation.
For more information call 519.310.JOHN (5646)