If you’re a regular driver, you likely know the pain of getting a dreaded traffic ticket. And while no one likes dealing with these types of setbacks, the added cost can make the experience all the more annoying.
Traffic tickets can be small or large in cost, it all depends on what you were fined for, among a variety of other factors. Regardless, it can be challenging to cover the cost of any traffic ticket. If you’re currently dealing with a traffic ticket that you can’t afford, you may want to consider a traffic ticket payoff loan.
Ways To Finance A Traffic Ticket
If you can’t afford to pay your traffic ticket, you can use a number of other financing options. You can charge the cost to a credit card, take out a personal loan, get a payday loan, a line of credit or ask for help from a friend or family member. Let’s explore the advantages and disadvantages of each option below.
Credit Card
A credit card is a convenient form of credit you can rely on in emergencies. But whether you should use it to pay off your traffic tickets depends on your financial circumstances. Typically, you should use your credit card if you know you can pay off the amount within the same billing cycle. If you can’t, it’s best to look at other options that have a lower interest rate.
Advantages
- Buys Time. By using a credit card, you will pay the expense now and owe the credit card’s balance later. If you need some more time to come up with the money and don’t want to miss the payment deadline, a credit card is advantageous.
- Pay from Home. Not all methods of payment are accepted online or by phone, for example, debit card or cash payments. Credit cards can be processed online or by phone which saves you a trip.
Disadvantages
- High Interest. Credit cards have high interest rates which means if you leave your balance unpaid for too long, you’ll end up significantly increasing the cost of your ticket.
- Potential Lack of Coverage. Depending on how much your traffic ticket is and the credit card balance available to you, your credit card may or may not cover the total expense.
Personal Loan
If your traffic ticket is quite high, a personal loan may be the right solution. A personal loan is a type of installment loan that involves a one-time lump sum of money issued by a lender to a borrower. The funds must be repaid by a specific due date, along with interest, in regular installments.
These loans are usually unsecured, which means they’re not collateralized by an asset of value. Instead, unsecured personal loans are backed by a borrower’s creditworthiness and the contract between the lender and borrower.
Advantages
- Quick and Convenient. Fortunately, when you’re in a pinch for money, you can get a personal loan rapidly and easily.
- Full Cost Coverage. Since personal loans are often personalized to the borrower’s needs, you’ll likely be able to get approved for an amount that covers the total cost of your ticket.
Disadvantages
- High Interest and Other Financing Fees. Personal loans tend to have higher interest rates compared to other forms of financing. In addition, there may be other applicable financing fees, such as origination fees. All of these add up and can put a dent in your wallet.
- Possible Security or Collateral. Depending on your financial situation, you may choose to put up an asset as collateral against the loan. Using security can help lower interest rates and negotiate better loan terms, but remember you’re also risking losing that asset.
Line of Credit
A line of credit is a type of revolving credit that lets you draw money from your account up to a certain limit. It works somewhat like a credit card in that you can use the funds as needed, up to your credit limit. Instead of paying interest on the entire credit limit, you only pay interest on the funds you withdraw. Once you repay the money withdrawn, you can access the funds again as needed.
Advantages
- No need to reapply for a loan. Rather than apply for a loan every time you need financial help, a line of credit will always be available to provide the extra funds you need when you need them. Just withdraw the money on an as-needed basis instead of re-applying for a loan.
- Flexible payments. With lines of credit, you don’t have to repay the balance until the draw period has ended. Until then you can simply make the minimum or sometimes interest-only payments.
- Lower APR than credit cards. The interest rate you pay on your credit card can be as high as 20% or more. On a line of credit, you can expect to pay a fraction of that.
Disadvantages
- Variable interest. A line of credit typically comes with a variable rate, which fluctuates based on the prime rate. That means your payments can change on a regular basis based on your outstanding balance and rate fluctuations, making it more difficult for you to budget.
- Temptation to spend more. With money readily available to you, it can be tempting to tap into your line of credit to cover the cost of an unnecessary expense if you’re not disciplined with your spending habits.
Payday Loans
A payday loan is a short-term loan made for a small amount of money, usually no more than $1,000 to $1,500. Unlike installment loans which allow you to repay the loan in installments, a payday loan must be repaid in full all at once, usually at the time you receive your next paycheck.
These loan types are very easy to get approved for and funds are issued almost immediately after approval. However, in exchange for this convenience, the interest rate charged for payday loans tends to be quite high compared to other loan types.
Advantages
- Easy Qualifications. You don’t need a high income or excellent credit score to get approved for a payday loan. In fact, there’s usually no credit check involved. As long as you’ve got sufficient income and an active bank account, are of the age of majority, and are a Canadian resident, you can qualify for a payday loan.
- Fast funding. As soon as you’re approved for your payday loan, the funds are deposited into your account almost immediately.
Disadvantages
- High interest. Payday loans have the highest interest in Canada. As such, you could owe considerably more than what you originally borrowed by the time the loan and interest are due for full repayment.
- Low loan amounts. You won’t be able to borrow thousands of dollars with a payday loan. Instead, these short-term loans are only meant for small cash advances.
- Short repayment terms. The borrowed funds, plus interest, must be repaid by the time you get your next paycheque. That means you won’t have the luxury of making smaller installment payments to pay off your loan.
Friend Or Family Member
Another option you can consider is borrowing from your friends and family. Rather than taking a high-interest payday loan, you can borrow a small amount of cash from someone you know, without having to worry about interest or fees.
Advantages
- No Interest or Financing Fees. Usually friends or family do not charge interest and other financing fees when they lend to their peers.
- No Formal Disbursement Process. Lending institutions aren’t always the fastest at getting borrowed funds into your bank account for use. With friends and family, you can get the funds nearly instantly because there aren’t any boundaries in place.
Disadvantages
- Mixing Money and Friends or Family. There’s an old saying that goes something along the lines of “friends and money don’t mix”. There’s a lot of truth in this saying because money can make the dynamic of a friendship or relationship with family feel business-like. Of course, this depends entirely on your personal relationships, only you can judge if it’s appropriate to borrow money or not.
What You Should Consider Before Taking Out A Traffic Ticket Loan
Financing the cost of a traffic ticket might work for your financial position, or it might not. Before making a decision, take some time to consider your financial situation, options and financial goals to ensure you make the best choice possible. To determine if a traffic ticket loan is right for you, ask yourself the questions below.
- How much is the traffic ticket and when does it need to be paid off?
- Is going to court to fight the ticket an option?
- Are you choosing a reputable lender?
- What is the interest rate or financing fees?
- Can you afford the payment plan?
What Will A Traffic Ticket Cost You?
In Canada, there is an array of fees you could incur related to traffic tickets. The cost really depends on the traffic violation you committed among other factors. One of the most serious traffic tickets you could incur is related to going over 50 km/h on an Ontario highway. If you were caught doing this, you would incur a fine of up to $10,000, roadside license suspension and have your vehicle seized on the spot.
In addition to getting a traffic ticket, your insurance company will be notified of any tickets you get which can increase your rates. You could also acquire demerit points. If enough are acquired, you may need to attend a meeting to justify keeping your license or have your license suspended entirely. Not to mention you may lose the ability to drive all together which can be a massive inconvenience for your life as a whole.
Learn how to defend yourself against a speeding ticket.
The Consequences Of Not Paying A Traffic Ticket
When the cost of a traffic ticket is immense, you might be thinking about simply not paying it. Not so fast. There are consequences of not paying traffic tickets which can all come back to haunt you in the future. If you fail to pay a traffic ticket, the following may become applicable to you:
- Increase in fines
- Extra fees
- Suspended license
- Court date
Find out if parking tickets affect your car insurance rates in Canada.
Additional Reading
Traffic Ticket FAQs
What happens if you don’t pay your traffic ticket in Canada?
How do I avoid getting a traffic ticket?
Can I use a payday loan to pay a traffic ticket?
Bottom Line
Traffic tickets are never fun, but even worse things can happen if you don’t pay them on time. Paying off the ticket on time should be your number one goal not only to avoid further penalties but to prove that you are responsible, despite getting a traffic ticket.
If you’re currently dealing with a traffic ticket and don’t have the funds necessary to cover the cost, Loans Canada can help match you with a lender who can get you the financing you need.
