- Any credit accepted
- Rates from 6.99%
- Doesn't affect your credit
- Loans up to $50,000
- Re-establish your credit
- Apply once, get multiple options
Payday loans are a last resort that many Winnipeg borrowers turn to in order to resolve a pressing financial situation. Unfortunately, while payday loans can seem convenient, the circumstances where they are actually appropriate are few and far between. Wondering why payday loans are so frowned up? Keep reading to find out.
As we said, a payday loan is very rarely the right choice for anyone. In fact, Winnipeg borrowers generally only apply for payday loans because:
Take a look at this infographic to know the true cost of borrowing.
When approval from other lending sources in Winnipeg is not possible, it’s easy to rely on payday loans for every cost, whether it’s an emergency or not. That’s where the payday loan cycle begins and sometimes never ends. Besides the high-interest rates and administrative fees (which are also numerous), there are two major ways that the cycle can quickly get out of hand.
While the province’s maximum interest rate ($17 per $100 borrowed) is actually not as high as other parts of Canada, two services that payday lenders are allowed to offer in any town or city in Manitoba (Winnipeg included) are “rollovers” and “loan extensions”.
A rollover is when a payday lender offers you a second loan before your first is paid in full. An extension, on the other hand, is an offer to extend your payday loan term beyond the general 2-week period. While both options are marketed as ways for you to pay off your first loan easier, they also come with hefty penalty fees. A loan that should have been small then becomes hugely problematic and more expensive by the day. Once again, this can cause you to take out one loan after the other just to scrape by. In fact, rollovers and extensions can lead to so much debt that they’ve been banned in several provinces.
Another extremely hazardous fact about payday loans is that they may leave you vulnerable to predatory lending, which can include scams, identity theft, and fraud. While there are plenty of legal payday loan lenders all over Winnipeg, there are also many fake organizations established by scam artists who will try to charge you unreasonably high prices or steal your financial and personal information. Since payday loans are normally easy to get, borrowers in desperate financial situations willingly apply for what they think is fast cash, divulging their banking information in the process. Unfortunately, that’s exactly what predatory lenders and scammers are banking on.
Here are some red flags that you can look out for to avoid these predators:
Check out this infographic for even more information about the payday loan cycle.
So, now you know how to spot an illegal payday loan lender in Winnipeg and Canada, in general. However, remember that even legal payday loans can cause terrible debt. If the payday loan cycle worries you, stay calm, because there are ways that you can break it or avoid it altogether, including but not limited to:
Need to access your home equity? Here’s how.
If you’re already in serious debt caused by your payday loans and other expenses, you should take measures to alleviate the situation as quickly as possible. You can provide yourself with some debt relief by using one of the following options available in Winnipeg:
Done by yourself or with a debt settlement companyin Winnipeg, this involves a negotiation with your lenders to prove that you cannot pay your full outstanding debts. If accepted, your settlement should allow you to pay less than your full balance.
Click here to learn how to negotiate a debt settlement on your own.
This option involves applying for one large loan to pay off all your other debts at once. While debt consolidation loans can sometimes be hard to qualify for, you can make the process easier if your application is backed by a cosigner or security (the offer of assets as collateral). If approved, the main benefit is that you’ll only have to keep track of one month-to-month payment, instead of several.
A debt consolidation program in Winnipeg is similar to a debt consolidation loan, however, you would instead need to seek out a credit counselling service to facilitate the process and negotiate with your lenders on your behalf. These programs are often cheaper and more convenient, as you don’t have to apply for a loan. Instead, you’ll make payments to a credit counsellor in Winnipeg, who will pass them along to your creditors.
To see some additional benefits of debt consolidation programs, check this out.
Besides bankruptcy, a consumer proposal is one of the most drastic debt solutions you can apply for in Winnipeg. In this case, you would need to hire a licensed insolvency trustee to oversee the proceeds and offer a proposal to your creditors that allows you to pay back your outstanding balance through equally divided payments or lump sums. If the proposal is accepted (be warned that your lenders may not agree to it), all collection efforts, wage garnishments, and other legal actions against you will stop immediately. However, these proposals can cause hefty damage to your credit score and remain in your credit report for 3 years following completion. During that time, it may be very hard for you to get approval for other credit products or reasonable interest rates to go with them. Only apply for a consumer proposal when your debt situation is too heavy to manage alone but has not yet reached the point where bankruptcy is needed.
Wondering if you can pay off your consumer proposal early? Find out here.
By far the most drastic and detrimental solution, declaring personal bankruptcy should only be considered when you’ve exhausted all other options available in Winnipeg. Here, you would also need to seek an insolvency trustee to help you through the process. If they can determine that you have no way of paying your debts otherwise, a court judgement will be passed that frees you from the majority of your debts (some secured debts, like mortgages, may not qualify). Again, any legal actions against you should cease.
If you’re living in Winnipeg and your financial situation is a bit worse for wear, it’s probably better to avoid payday loans. Instead, try contacting Loans Canada. We offer solutions that can help you avoid or break the payday loan cycle.
As a senior, getting a loan can be more difficult due to lower income and age restrictions. Thankfully, there are many home equity loans for seniors i...
To better protect vulnerable borrowers, provinces have enacted legislation that sets boundaries on what alternative lenders can and can’t do.
Do you find yourself saying "I need my money today" often? Here are some simple and quick ways to get money quickly.
These are the best bad credit loan options in Canada right now. An easy list to make an easy choice. Here is everything you need to know!
A line of credit is a less rigid credit option. You only pay interest on what you use. That means flexibility. Read this article to get the
If you've been rejected a loan from easyfinancial, you'll be happy to know that there are plenty of easyfinancial loan alternatives in Canada.
If you are looking for loans like Fairstone, you can find them on Loans Canada. These Alternative lenders offer secured and unsecured loans.
easyfinancial vs. Fairstone? What is the difference? If you have bad credit, you can get a loan from this one faster
Maligayang pagdating sa Canada! Welcome to Canada! Do you know what is a soso (paluwagan)? Are they better than personal loans?
Did you get the CEBA loan? The CEBA loan repayment due date is close. Find out when and what can you do avoid default.
Get expert tips and guidance from a community of renown personal finance experts right here at Loans Canada. We're here to help you stay informed so you can make the best financial decisions.