Why are consumers tempted by expensive pay day loans?
- Because they think they can pay back the loan in 2-4 weeks?Think again. Thousands and thousands of people are never able to make the payments on time for one reason or another, even those with good jobs. According to a recent Toronto Star article, they end up paying from 390% to 800% in annualized interest and end up drowning in debt.
- Because it is fast cash?Fast cash is like fast food. It can make you really obese. Financially obese. Especially if you miss payments. Even for two weeks.
PAYDAY LOANS CAN RUIN LIVES
A lot of people are like Marnie J., a single mother of two children and an executive secretary with a good job, who wanted some fast cash for dental bills and camp for kids, so she borrowed $500 from one pay day loan company for two weeks which cost $105 in fees. Two days later, her car broke down and she had to come up with another $1500 which she got in no time at all from another pay day loan company which charged her $315 for two weeks. So now, Marnie was having to come up with at least $420 every two weeks just in interest on loans totalling $2000.
For personal reasons, Marnie could not make the payments on time. So, she did what a lot of pay day loan people do. She refinanced her loans. At the end of a month, she had paid $840 in interest and hadn’t even begun to pay off the $2000! “Thank God, I had RRSP’s to cash in, and i paid off the pay day loans. They are like quick sand. They could have ruined my life.”
SAY NO TO PAY DAY LOANS. SAY YES TO PRUDENT FINANCIAL.
If Marnie had borrowed from Prudent, which specializes in open and affordable loans to people who have been bankrupt, in proposal or past bad debt, this is what she would have paid: For $500, she would have paid in total fees over one year the amount of about $108. For $1500, she would have paid in total fees over one year the amount of about $330. And if she found her bank account short, she could have called Prudent three business days before the payment date and Prudent would have held the payment free of charge for up to another two weeks!
Unlike payday loans companies, Prudent works with their customers to rebuild their credit rating.
Click here to learn more about smart borrowing and fixing your credit score: www.prudentfinancial.net