It’s not uncommon to find yourself in a sudden financial emergency or to realize that your paycheque didn’t stretch quite as far as you needed it to. Some may be tempted to consider a payday loan to tide them over. But this is rarely a sound financial idea.
How do payday loans work?
In theory, payday loans offer quick relief when you experience a financial setback. These short-term lenders generally offer up to $1,500 to cover urgent expenses, under the guarantee that you’ll pay back the loan using your next paycheque. But the reality is, payday loans are a poor solution to the problem. Payday loans come with extremely high-interest rates and fees, making them one of the most expensive options for borrowing money. Often, borrowers find themselves in a never-ending cycle of frequent borrowing and excessive debt, making it hard to get out of payday loan debt.
What are the payday lending rules in Canada?
Each province and territory has its own rules and restrictions around payday lending. For more information on payday loans and lending rules where you live, visit the Financial Consumer Agency of Canada.
If you’ve taken out more payday loans than you can manage and are looking to get out of payday loan debt, meet with a Grant Thornton debt professional for a free, no-obligation chat to learn more about your options.