Everywhere you look these days there seems to be a Payday store on every corner. They advertise quick cash whenever you need it – from a leaky roof, medical issues, unexpected emergencies, and other financial shortfalls. Loans usually range from $50 to $1,500, as an advance on your next paycheck. These loans are different from traditional bank loans as they are typically short-term to cover expenses until a person’s next payday. A person typically pays a flat rate for the amount borrowed with a repayment schedule based on their next payday.
However, a person should consider prior to entering into one of these financial arrangements that they are in effect borrowing against their next paycheck. This as a result may leave them with a partial or even worse no paycheck to handle their living expenses due the timing and amount fee and principle repayment. This potentially has the person entering into further payday loans to cover daily living expenses due to the shortfall. Consequently, a person could find themselves in a constant cycle of borrowing under these arrangements without a possible exit. Accordingly, a person becomes trapped in a never ending cycle of payday loan borrowing leading to future financial difficulties as the lending rates increasingly reduce their disposable income available for living expenses. In effect a person ends up in a position of having a payday without a paycheck.
We hope the information discussed has given you some insight into how payday loans work and the potential pitfalls and how they may affect you. We at Allan Marshall & Associates Inc. are always available free of charge to discuss any matters dealing with your financial situation. Please visit us at www.wecanhelp.ca or don’t hesitate to call us at 1-888-371-8900.