Watch Our For These Types Of Debt

Loans Canada: The Country's Best Loan Comparison Platform

Watch Our For These Types Of Debt

Written by Priyanka Correia
Fact-checked by Caitlin Wood

Updated August 11, 2021

Watch Our For These Types Of Debt


Bad Debt Debt Lookout

According to a report from Equifax, Canadians carried an average debt of $23,760, not including mortgages. While some types of debt can be good others are considered bad for your financial health. Generally, student loan debt and mortgages are considered as good debt as it adds value to your life and assets. For example, a student loan is considered an investment toward your future ability to earn a good income. On the other hand, payday loans, auto title loans and other high-interest loans are considered as bad debt.

Do You Have This Type of Debt? Then You May Be in Trouble

Many Canadians carry some type of debt, but it’s important to understand that no two debts are alike. Some types of debt carry a heavier burden than others. 

A Good Example is Payday Loan Debt

Payday loans are by far one of the most predatory forms of lending. They lure you in with phrases like “no credit checks” “easy application” and “fast cash”.  But behind that hides APR rates between three and six hundred percent and late payments fees that can trap you in a cycle of never-ending debt

Another Example is Debt From Cash Advances

While convenient, a credit card cash advance can cost you for 2 reasons:

  • First. You’ll be subject to a cash advance fee which can be a flat rate or a percentage of your total transaction. Usually whichever is higher.
  • And Second. There’s no grace period, which means you begin to accrue interest right away. 

For the Last Example, Let’s Take a Look at Debt From Auto Title Loans

Auto title loans are short-term loans that are secured against your car. This form of debt can be very dangerous as the lender can seize your car if you default on the loan. To top it all of, it comes with extremely high-interest rates, fees which can make repayment difficult.  

Bottom Line

If you’re struggling to manage any one of these debts, be sure to reach out to a debt specialist. They can review your finances and provide you with a personalized debt relief solution

Rating of 5/5 based on 2 votes.

Priyanka is a marketing major who graduated from John Molson School of Business in 2018. She has experience in writing about personal finance, media outreach, and SEO. She is passionate about marketing and educating Canadian consumers about how to take control of their financial lives.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Industry Spotlight

What's happening with Canada's credit industry?

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...

Read Post
Find The Best Rate
In Your Region
Best Personal Loan Provider by Greedy Rates

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.