Payday Loans – Getting Hooked

PayDay Loans

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 a pretty full disclosure. Understandably, the fact that the introductory loan was for 14 days as well as the 173.9% APR and 547.50% APR were 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.

Why Do We Object to Payday Loans?

We see too many people in the Toronto area who 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.

The Ontario government rules around payday loans do no allow roll-over loans – that is at the end of 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.

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 behaviours, 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 you live in the Toronto area, are overcome with payday loans and other debts – you are welcome to call David Sklar & Associates, Trustee in Bankruptcy for a FREE consultation at 416-498-9200. Our caring, licensed professionals will review your finances in detail and discuss all of your options for getting debt relief.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 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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The best decision I've made was to contact David Sklar & Associates, they are experts in this matters and also have dedicated Licensed Counsellors that provide the best customer support, like Rhoda Lewis, who I highly recommend. She worked tirelessly on my case, explaining ever detail to me willingly. She demonstrates a true interest in her clients. I appreciate how she patiently walked me through what to do, step by step. I now have control over my finances, as a result my life is much more peaceful and I can focus on what matters. Thank you!
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Jerry at David SKLAR helped me thoroughly understand my options and made me feel at ease. If you are looking at this type of service/help, I 100% recommend you give them a call.
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Rhoda is a wonderful person, She help me and guided me throughout the process. I couldn’t do it without her support and expertise. Now I can start fresh and full of hope of a better life ahead of me.
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The service I recieved from David Sklar and Associates was great. I was able to meet with Christin Sylver. She is kind, understanding and, professional. She was able to answer all the quesions that I had regarding my debt. At the end of our meetings, I felt that there is a heavy burden lifted from my shoulders. I recommend Chistine to anyone who is looking into debt relief.
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12:11 04 Jun 22
Jerry is a very patient person, he answered all my questions and made this experience so smooth and easy for me. I was not sure what to expect but dealing with him made me feel so much better. He sure knows what he is doing and how to put people at ease for sure (should have done this long ago). I recommend him to anyone I am so glad I had him on my side and now to do my part. Thanks Jerry ur greatPattie
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Rhoda Lewis helped me achieve a fresh start two and half years ago! She was very professional with a very warm, caring personality! I emailed her today with a question and she responded quickly. She's great at her chosen profession!!
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21:05 10 May 22
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03:08 10 May 22
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