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While incomes have been rising in Saskatchewan for years, that doesn’t mean some people aren’t still struggling to get by. Unforeseen circumstances, bills and a variety of other things can make it hard for people to make ends meet. If you have bills due and cannot afford to pay them, you may need to borrow money.
Unfortunately, many loans can take days or weeks to finalize, and by that time it’s possible that you’ve missed payments or accrued penalties. This is the exact reason why payday loans are often popular among consumers in Moose Jaw who are dealing with a financial problem or emergency. Keeping reading for everything you need to know about payday loans.
10 questions everyone should ask before taking out a payday loan. Click here.
What is a Payday Loan?
Payday loans in Moose Jaw are a quick way to gain access to a small amount of money, in between your paycheques. Many people will need to use them to pay bills, get groceries, or to cover an unexpected expense. These same-day loans are usually for less than $1500 and normally have a two-week term. They aren’t meant to be a long term solution, only when you are desperate for short term cash.
All you really need to secure a payday loan is have a valid chequing account, proof of income, address, government-issued ID, and be the age of majority in Saskatoon. As a result, they are quite easy for almost anyone to get. While that all sounds good so far, there are some definite drawbacks to using a payday loan.
Sky-High Interest Rates
The Interest rate on a payday loan in Moose Jaw is often in the triple digits, making it the most expensive way to borrow.
Fees and Penalties
In addition to high-interest rates, many payday lenders also have fees and other terms that can end up costing you more money or crippling you financially.
Do you know what the true cost of borrowing is? Click here to find out. What is the Payday Loan Cycle of Debt and How Do You Break it?
One of the absolute worst and most dangerous parts about payday loans in Moose Jaw is the cycle of debt they can create. The payday loan cycle of debt is a vicious cycle of constantly having to take out new payday loans to cover your old ones. As you could imagine, this can ruin your finances very quickly. The cycle of debt looks something like this:
- An emergency or other financial problems leave you needing money very quickly
- Standard loans or other methods of borrowing aren’t quick enough, so you go with a payday loan
- However, you haven’t recovered financially yet by next payday, but it is time to pay off the loan
- As a result, you take out a new payday loan to pay off the last one
- From there, the cycle can continue multiple times and make it impossible to save money
Some consumers in Moose Jaw are unlucky enough to find themselves stuck in the cycle of debt for months and even years. However, there are a few steps you can take to get yourself out of it. First of all, you need to try and cut costs and save money as best as you can. This can include spending less on food, cancelling a subscription, selling items or even taking on another job.
Next, you need to have a budget. Budgeting will keep you on track and let you know how much you are bringing in, and how much you can afford to spend. Other things you can do are ask friends or family for help or utilize a debt relief solution, like a debt consolidation program.
It won’t be easy and you won’t see any change overnight, but with some work, you will be able to break from the cycle.
Check out this infographic all about the payday loan cycle of debt.The Warning Signs of Predatory Lenders
While most payday loans in Moose Jaw are legitimate, that, unfortunately, isn’t always the case. Loan fraud is a real issue in Canada and each year millions of dollars is stolen because of it.
When it comes to fraudulent or predatory payday lenders, there are a few red flags to look out for,
- Rushed approval or pressuring you into signing papers you haven’t read
- Asking you to lie or lying to you
- They try to change details after you have already signed an agreement
These are not the only signs but are some of the most common that you should watch for. Of course, not all payday lenders are predatory, but loan scammers will often pick on those who don’t have a lot of other options. Simply put, if you are uneasy about a loan or something seems too good to be true, it probably is.
Do you know your rights when it comes to payday loans?
Right and Wrong Times to Consider a Payday in Moose Jaw
While you now know a good amount about taking out a payday loan in Moose Jaw, if you’re still confused about whether a payday loan is the right option for you for not, here are a few situations to help you make the right decision.
Times Where a Payday Loan Makes Sense
As you might have been able to figure out, payday loans are rarely the right choice for many Moose Jaw residents. They are expensive, sometimes predatory, and can easily get you trapped in a cycle of debt. The only time it makes sense to get one is if it is literally your last hope. Also, if you have a serious emergency and need cash quickly, but are sure you can pay off the loan on time and in full, taking out a payday loan is fine. However, be sure to not make a habit out of it.
Times Where a Payday Loan Doesn’t Make Sense
A payday loan is almost always a bad choice. Their interest rates make them near-impossible to have any sort of value for most people. They are especially bad decisions when you have no excess cash to use to pay them off when you have no real emergency or have an unstable income. For example, if your next paycheck isn’t as much as you thought it was going to be, it can put you in a very rough spot.
Thankfully, there are several other options at your disposal that may be able to keep you from ever having to take out a payday loan. While a standard loan is often your best bet, you might not be able to get approved and get your money soon enough to deal with your emergency.
Alternatives to Payday Loans in Moose Jaw
A payday loan isn’t your only option in Moose Jaw if you need quick cash in a pinch. There are plenty of ways you can get money quickly if you need it. One of the first things you should consider doing is to ask your family or friends for help. They may be willing to assist you, and even if they want to charge you interest, it will likely be much less than a payday loan would be.
While this can be tough for some people if they don’t like asking for help, it can be a good way to save a lot of money. Another decent alternative is to use a credit card. While it isn’t much better, interest rates on your credit card are likely to be cheaper.
If you own your car or home in Moose Jaw, you could also use them as collateral to borrow money. Home equity loans and vehicle title loans are common offerings and are relatively quick and easy ways to get money. However, if you go this route, it is important to be very careful. If you default on these loans, you are putting your home or your vehicle at risk.
Of course, before ever choosing an alternative, you need to think long and hard about which solution works the best for you. It also couldn’t hurt to speak to an expert or a financial advisor in your area and have them help you come up with the best option for your unique situation.
Know Your Options
While you might need to go with a payday loan in Moose Jaw at one time or another, be sure to consider other (more affordable) options first. If you want to learn more about additional options instead of payday loans, or want to understand payday loans better, be sure to reach out to Loans Canada. We are confident we can answer any questions you may have.
