We know how difficult it can be to make payments when you have trouble making ends meet between two pay periods. You’re not sure what strategy to take to overcome this ordeal, and you may choose a cash advance from a payday loan provider until you get out of this bad patch. However, do you realize that this loan could cost you more than what you originally borrowed? Indeed, this is the most expensive type of loan.
We know that payday loan repayment can be a stressful experience. You can read the following topics to better understand the payday loan process, the risks it can create and how to pay off your loan without breaking the bank.
What should I know about the costs of the payday loan?
Although the costs of the payday loan vary according to each company, the following costs are normally always present:
- Interest charges
- File opening fees
- Renewal fees
- File processing fees
- Penalty for refund in advance or late
- Service fees
- Verification fee
- Commissions and fees
The estimated interest charges on payday loans are just under 600% each year! Adding all the fees mentioned above, the amount you will have to repay will be much higher than the one you originally borrowed.
In addition, if your payday loan is a considerable amount, the issuing company could extend your loan for a fee. It could also give you a new loan to pay off the old, so-called renewal, which will plunge you into a repayment cycle that will never seem to end.
How can I put an end to the loan repayment cycle?
If you are caught in a payday loan renewal or depend on this loan to survive between two pay periods, you may consider the following options to regain control of your finances:
With the consumer proposal, you can create an affordable repayment plan for your unsecured debts, such as payday loans. For more information on this topic, see our section on the consumer proposal .
Keep in mind that neither the Debt Management Program (DMP) nor the Debt Settlement Plan can release you from your payday loan obligations, since these are not debt solutions authorized by the tribunal. Moreover, payday loan companies do not recognize them very rarely.
You can also use the expertise of our financial adjustment advisors, who will evaluate your financial situation free of charge, without 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 completing the application form. No matter the nature of your financial problems, we are here to help you.
In addition to the options you can do yourself, our licensed insolvency trustee will offer you other formal debt solutions, such as a debt consolidation loan, a debt management program, a debt management plan debt settlement as well as a consumer proposal. Before even considering bankruptcy, all options will be explored to find the one that best suits your situation.