WITHOUT PREJUDICE
Hi folks! Let’s talk about THE most expensive way to borrow in Canada: PAYDAY LOANS
Payday loans are provincially legislated (except in NFLD) and there is a harmonized 15% per biweekly period making the annual interest rate 390% (15 x 26). Additional costs such as NSF fees and other add-ons make the annual cost of borrowing often over 400%.
In May 2024 the FCAC conducted research on payday loans and their customers and it was clear from the research that many payday loan users are not aware that this is the only type of loan that quotes their interest rate over a biweekly period rater than annually like EVERY other creditor in Canada making these loans six to twelve times more expensive than ANY other type of loan in Canada.
If you are prone to this type of borrowing, you can change this pattern and instead implement the following policies:
1. Keep a small emergency fund
2. Establishing a low interest line of credit at a bank or credit union
3. Establishing a spending budget and reviewing it often
4. Seek financial literacy material to immunize yourself from making poor financial choices
Bad habits are hard to break but the reward is feeling financially confident. I hope this guidance has helped you. If your financial hardship is no longer manageable you can book a consultation with me.
Cheers,
DGB
Legal disclaimer: The material provided on this web site is for general information purposes only. It is not intended to provide legal advice.
Helpful Links:
Small Business loans $15,000 to $4M