Payday Loan Trap

payday loan trap

Table of Contents

Payday Loan Introductory Offers

There are many ways to entice people to do things that are not in their best interest – from peer pressure to high-end marketing pushes.

Recently a payday loan ad in a local paper caught our eye. To entice new clients to their store they offered to only charge 173.9% APR on a $300 14-day loan.

APR means – annual percentage rate.

Now by their standards 173.9% APR is a deal – usually, they charge 547.50% APR!

We appreciate good marketing as much as anyone – and the ad appeared to provide full disclosure. Understandably, the fact that the introductory loan was for 14 days as well as the 173.9% APR and 547.50% APR was buried in the small print.

In large print was an offer of a $300 Loan at a cost of $20 (for a first-time loan only).

We do understand that when most people take out their first payday loan they are desperate. And paying $20 to get $300 today might seem tempting. But the reality is, when the next payday comes around, they are going to have $320 less to pay their bills with – and they will be more likely to fall into the payday loan trap.

The dangers of Payday Loans

Many people in the Toronto area have gotten ‘hooked’ on payday loans and end up stressed and overwhelmed by their debts.

It is not just the payday loan (which is a serious problem on it own) it is also what happens to all the other debts when after paying for a payday loan there is not enough left of the paycheque to pay the rest of the debts and bills.

Payday loan Laws in Ontario

The Ontario government rules around payday loans do not allow roll-over loans – that is at the end of the loan period payday loan companies are not allowed to roll the outstanding balance into a new loan, or to give out a new loan until the original loan is paid.

Of course, this often means that people who are desperate for their payday loan fix will take out a new payday loan with a different company. We have seen clients with up to 14 separate payday loans!

Just imagine what it is like to owe 14 payday loans and be unable to repay them. Getting calls from 14 different collection agents plus all the other creditors who are not being paid – the stress is overwhelming.

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Not Everyone Who Takes Out a Payday Loan Ends Up in Trouble

This is true – many people only use payday loans once or twice and do not end up in financial difficulties.

However, our almost daily contact with Toronto area residents who have ended up in serious trouble as a result of payday loans and other related debts gives us a clear picture of what can happen when someone gets trapped into using payday loans.

Breaking The Payday Loan Habit

Just as with other risky behaviors, your best bet is to never start.

But if you are caught in the payday loan trap – you have two basic ways out:

  1. Stop using payday loans and find a way to pay off your outstanding payday loans while also paying off your other debts. Check out this useful article on how to stop using payday loans.
  2. If you are too far in payday loan and other unsecured debt to ever be able to get out of debt on your own – contact a bankruptcy trustee to find out about the government-authorized programs that can help you get out of (be discharged from) payday loans and other qualified debts.

If Your Looking for Debt Relief David Sklar & Associates Can Help

If you live in Ontario and are overwhelmed with payday loans and other debts – speak to the experts at David Sklar & Associates, for a FREE consultation. Our caring, licensed professionals will review your finances in detail and discuss all of your options for debt relief.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
Jasmine Joseph
22:08 13 Jan 23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
Ariel Domingo
02:33 29 Dec 22
I was a reck talking yo Jason Sklar was easy comfortable he explained everything and put my mind at ease I would recommend the team od sklar to everyone. I have already talked to my ci workers about them
kevin mcweeney
01:13 22 Dec 22
The team at David Sklar & Associates is fantastic.I worked with Jerry whom not only made - what seemed like intimidating process to initiate at first - comfortable.He made everything transparent and took the time to explain the process every step of the way.He was kind, attentive, and professional. Everything was made straightforward and stress free and we found a solution together that worked.Thanks to Jerry and the team.
Jordie Angiolillo
18:22 21 Dec 22
From day one till the end which is today😁 DavidSklar gave me a 5star service and treatment. And I will 100% recommend him and his Associates. This is the best Christmas present ever! Thank you David! More business to come! Merry Christmas and a Happy New Year!!!
barbee diaz
16:37 16 Dec 22
I FOUND DAVID SKLAR & ASSOCIATES BY GOOGLING "BANKRUPTCY" (EARLY NOV. 2021). ON NOV.4, 2021 I HAD A MEETING WITH CORI NARON AT HER OFFICE AT ST CLAIR ANDBATHURST. HER POSITIVE APPROACH TURNED ASTRESSFUL SITUATION INTO A STEP BY STEP UNDERSTANDABLE PROCESSON SEPT. 23, 2022 I OBTAINED MY AUTOMATICDISCHARGE FROM BANKRUPTCY AND MY CERTIFICATE OFDISCHARGE.THANK YOU CORIBRUCE BURGESS
bruce burg
21:35 02 Dec 22
Jerry was wonderful and provided superb service. He is very knowledgeable, trustworthy, and made an intimidating and shame filled time in my life stress free. I hesitated for a long time to take the next step, but Jerry answered all questions, was patient and made the process effortless. I am eternally grateful, and highly recommend Jerry’s services.
M J
18:41 01 Dec 22
Jerry was professional and was easy to deal with
Debbie Asquith
00:09 29 Nov 22
I was quite nervous and a little embarrassed that I needed financial advice. I met with Jerry Janiec and he was very helpful. He made me feel comfortable and explained everything in easy to understand terms so that I understood what my options were. I would recommend David Sklar & Associates for anyone in my position.
Melissa Blackburn
19:53 17 Nov 22
I was fortunate enough to be referred to David Sklar & Associates Inc. by a family member. Now in the10th month of a Consumer Proposal process, I am very impressed with the organization, professionalism and impeccable customer representation that I have experienced. To this effect, I amparticularly thankful to Jerry Janiec and Rhoda Lewis for their excellent work.
Suzanna Vaclavik
12:21 16 Nov 22
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