Toronto’s wealthiest are the most indebted. Yes, you read it right. If you have an emergency, there is a big holiday coming, having a function or house renovation, your desires will lead you to a payday loan for instant money. A casual thought of “I will pay it off by the time” can lead you to serious trouble and bring down your paradise into a nightmare. In reality, 45% of debt cases are the result of something unwanted or a desire to have something. In every case, your debt fails to be consolidated and ends up drowning in a debt lake. Emergency needs and desires are different things and both have different solutions.

Toronto is surely a fast-growing city. But the debt attached to a payday loan will be a major barrier on your road. In this blog post, we will learn about payday loan traps and how to get out of that nightmare.

Payday Loan Trap: Worst Nightmare

High Interest Rate and Fees

In Canada, Payday Loans can have an APR of more than 400%. Payday Loans are a convenient solution during unexpected financial challenges but as per the Financial Consumer Agency of Canada (FCAC), borrowing $100 for two weeks will cost you $15, which translates to an APR of 391%.

The Hidden Costs

Not only high interest rate payday loans also hosting a hidden cost. When you are unable to pay off the loan on time and need an extension period, you will be charged for rollover fees. Not only that, if you miss payment, it can result in a penalty fee.

Debt Cycle Risk

The Canadian Centre for Policy Alternatives (CCPA) reported that many payday loan borrowers take out multiple loans over the years to pay off previous ones. Due to its higher interest rate, hidden fees and short period of time, you will easily fall in to its debt cycle and soon it will become your nightmare.

The payday loan industry in Canada is estimated $2.5 billion each year to over 2 billion borrowers. Like it or not, but it’s the easiest way to get a fund for emergency needs; other options have long procedures and documentation work. Having a payday loan is not bad but getting trapped is. But there is a wake-up call and you can end your nightmare.

Wakeup Call: Escape the Payday Loans

Escaping from payday loans requires determination, planning and professional help. Here is some step you can consider:

• Create an effective budget: Analyse your financial situation and write down your liabilities and assets. Make sure to cut off all extra expanses for a few months.
• Find Alternatives: Consider a low-interest personal loan and credit card. If you have a bad credit score, consider getting a loan from credit unions; they generally offer short-term loans with a lower interest rate than payday loans Toronto. Look for a Government program that provides you financial assistance.
• Emergency Fund: Cutting of expanse and selling some unwanted stuff helps you to generate extra money. You can do over time to add a few more bucks to your salary. Open an automated account to transfer your money for future savings. Investing money in good organisations or money-saving programs will be beneficial.
• Expert Advice: Having a financial knowledge is easy, but implementation is hard. There comes a financial adviser. A financial adviser can help you go through financial crises and gives you useful, relatable advice and options to consider. They will help you to improve your money management skills.

Add-On: Back to Paradise

In Toronto, Payday loans are surly easy to get, but must consider the long-term consequences. Seek professional advice before exploring different and more reliable options. To debt consolidate payday loans, consider our reputable Credit720 team, which is well-known for its debt management program. Our credit counsellor can assist you in prepare an effective debt management programme and also provide you a guide for generating more money.

Considering all of the aforementioned points and connecting with a Credit Adviser will help you in rebuilding your Paradise and making you financially stable for the future.