Home Finance How Canadians Survive Using Payday Loans In 2020

How Canadians Survive Using Payday Loans In 2020

by Victoria Boatright

Life isn’t easy today. It’s full of challenges waiting for you to overcome them. Many people face monetary issues and struggle to make ends meet today. This is our new reality as the world economy is rather unstable; so many people don’t have steady employment.

What’s even worse, not many individuals have a savings account or an emergency account to save them in times of crisis. As a result, Canadian consumers have to turn to lending options. Here is how people survive using payday loans and professional tips to help you overcome disruptions and become debt-free faster.

Reasons for Taking Out Payday Loans

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More and more consumers opt for this lending solution when they are short of cash. That’s why Canadians have over $802 billion in consumer debt. Payday lending is more attractive than other types of financing as it is quicker and hassle-free. When you are strapped for funds until the next paycheck, you don’t want to travel to a conventional bank and gather multiple documents just to apply for a loan to get a few hundred dollars.

You are definitely looking for no credit check loans online on sites like NorthnLoans as they are very fast and easy to obtain. Payday lending has become very widespread over the past decade due to the growing number of monetary disruptions in consumers across the country. People are more willing to receive quick funds for the short term so that they can finance their needs. The main reasons for taking out this lending option are:

  • Pay overdue utility bills/rent;
  • Pay for medical bills;
  • Fund other urgent expenses;
  • Finance auto repair;
  • Pay for home remodeling;
  • Buy groceries;
  • Support your family until the next payday.

As you can see, the reasons why people opt for payday loans are obvious – they need quick financing to support their immediate monetary needs and help them survive for the next two or three weeks. This is the regular period for taking a payday loan. In other words, you will have to return the debt on your next payday together with the interest.

Pros and Cons of Payday Lending

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Canadians have over $802 billion consumer debt. Is it too much? Every lending option has advantages and drawbacks.

“Almost every consumer recognizes the risks connected with borrowing but they still turn to lending solutions instead of building their own savings account,” mentions Emily Holbrook, financial coach.

There is no perfect solution for the times you need to borrow some cash. In any case, borrowing comes with certain risks and should be considered as a responsible method of improving your financial situation. If you take it for granted and don’t review the terms of borrowing, you may end up being in an endless debt cycle.

Pros

Payday lending is attractive for the times when you need a small amount of cash. If you don’t need over $1,000 you can turn to this lending solution. It gives borrowers a chance to obtain quick funds for a shorter period of time, usually between two and three weeks. If you need a bigger sum for a larger period, you can opt for other lending solutions such as personal loans or credit cards. Another advantage is that the application process is very simple. Consumers need to submit a short web form on the web from the comfort of their homes. You just need to give basic financial and personal details to process the loan. The funds can be deposited in a short time on your bank account.

Cons

On the other hand, every payday lending option comes with certain risks and drawbacks. Speaking of payday lending, this borrowing option usually means higher interest rates compared to other solutions. This is due to a shorter repayment term. Creditors give out unsecured funds with no collateral so they want to ensure their funds will be repaid on time. Higher rates and extra fees mean your total sum will be much bigger than the initial amount you’ve borrowed. It pays to be careful and calculate the total sum before you sign any contract. Make sure you realize how much you will need to return and check if you can afford this sum.

How to Survive And Repay Your Debt Faster

Source: microsoft.com

If you’ve turned to a payday creditor for help several times or you find it difficult to repay the debt on time, you can benefit from the following tips on how to pay the debt off faster. Here is what you should consider:

  • Make a list of your debt – first of all, you need to know your total debt so that you can allocate this sum from your income. Check how much you owe together with all the fees and extra charges that some creditors have.
  • Spend less money – try your best to minimize your spending. You may want to decrease the expenditures for eating out. Also, create a list of things and groceries you need to purchase before you go to the supermarket. This will help you avoid wasting cash. Don’t buy new clothes or spend cash on entertainment until you know you are debt-free. Make it your priority.
  • Get a side gig – if you feel one salary isn’t enough to repay the debt and you keep rolling the debt over while the total sum increases, you may want to find a side gig. Let it be a part-time position you can do in your spare time or at the weekend until you repay the loan.
  • Create a budget – many financial experts believe that creating a monthly budget will be extremely helpful to each consumer who wants to improve their spending habits and learn how to save more funds towards their emergency fund or retirement account.

All in all, it’s not a shame to opt for a lending option when you are strapped for cash. You need to learn responsibility and know how much you actually need to support your needs so that you can easily pay the debt off and maintain your financial well-being.

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