We know how difficult it can be to make your payments when you’re having trouble making ends meet between two pay periods. You are not sure which strategy to adopt to overcome this ordeal, and you may opt for a cash advance from a payday loan provider until you are out of this bad patch. However, do you realize that this loan could cost you more than what you had initially borrowed? Indeed, it is the most expensive type of loan.
We know that paying off a payday loan can be a stressful experience. You can consult the following sections to better understand the process of the payday loan, the risks that it can generate, and how to repay your loan without breaking the bank.
What should I know about the costs associated with the payday loan?
Although the costs associated with the payday loan vary depending on each business, the following fees usually are always present:
- Interest charges
- File opening fees
- Renewal fees
- Processing fees
- Penalties for early or late reimbursement
- Service Fees
- Verification fees
- Commissions and fees
The estimated interest charges on payday loans are slightly less than 600% each year! By adding all the prices mentioned above, the amount you will have to reimburse will be much higher than the amount you had initially borrowed.
Also, if your payday loan is a considerable amount, the issuing company may extend your credit for a fee. She could also give you a new loan to pay off the old one, called a rollover, which will plunge you into a repayment cycle that will never seem to end.
How can I end the loan repayment cycle?
If you are caught in a payday loan rollover or depend on this loan to survive between two pay periods, you may want to consider the following options to get back in control of your finances:
With the consumer proposal, you will be able to create an affordable repayment plan for your unsecured debts, such as the payday loan. For more information on this subject, see our section on the consumer proposal.
Keep in mind that neither the debt management program (PGD) nor the debt settlement plan can release you from your payday loan obligations since these are not debt solutions authorized by the tribunal. Also, payday loan companies rarely recognize them.
You can also use the expertise of our financial recovery advisers, who will assess your financial situation free of charge, without any obligation. They will help you select the best option that will allow you to pay off your payday loan. You can request to receive a call from us by filling out the request form. Whatever the nature of your financial problems, we are here to help.
In addition to the options you can do on your own, our licensed insolvency trustee will offer you other formal debt solutions, such as a payday loan consolidation, debt management program, debt plan — debt settlement as well as a consumer proposal. Before even considering bankruptcy, all options will be explored to find the one that will best suit your situation.