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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So over the past few weeks I’ve had multiple contact with Christine. She was simply amazing. She helped me understand my debt and what options I had available to help relive some of my debt stress that’s affecting my own well being and my family.David Sklar and associates is simply put an amazing company and I highly recommend them to absolutely anybody needing help!
Adam Bertrand
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Christine Sylver was very helpful to my situation. No question asked, she went above and beyond just to give me the options that I need to solve my problems. She explained and made me understand my options. Thank you Christine! Everything was done in a week. Regards, to Richard Sklar for explaining everything further to me. 😊
Kris
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I was blown away by how kind and empathetic Christine and David were. I came into the process expecting to feel embarrassed, but they were so helpful and unquestionably supportive, they made the whole experience a positive thing. On top of that, Christine found a solution for me that was better than I ever could have imagined. I highly recommend Christine, David, and colleagues to anyone.
Mary M
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Christine Sylver has been very efficient in working with me in all aspects toward developing a very favourable consumer proposal which meets my financial budgeting very nicely. She also exhibited a very positive pro client attitude and was every pleasant to communicate with. Richard Sklar also demonstrated a very positive pro client attitude in explaining in detail all aspects. All great!!
Rob Hultgren
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Dealing with Christine was a real pleasure.She was very understanding professional and knowledgeable she answered all my questions.I left feeling relieved a big burden was lifted from my shoulders
John Horan
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Very happy I got in touch with Jackie! She has been a great help and a pleasure to work with! I highly recommend Jackie if you need help getting out of financial debt.
Hailey Cascagnette
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I had the pleasure of working with Jackie and she made the experience very easy and was very honest which I appreciated as I was extremely nervous to go through with the process. Any questions or concerns I've had after our meetings were answered no problems and although it's been a few weeks I can honestly say I've never felt so stress-free. Very thankful for Jackie.
Cassandra Arevalo
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Very considerate of how people can sometimes make mistakes and need help to get things back on track. Great team of people. Thanks to Jacqueline for all her help.
Kevin Chase
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My mother told me about this firm because they helped resolve her situation nearly 25 years ago. I had the pleasure of working with Christine Sylver. I should’ve done this years ago but I am where I am and it is what it is. Extremely courteous, professional and understanding. I hope to never need their services again but they would be my first call! A+
Patrick Martel
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Jerry was extremely thorough and ensured that as a client, I understood all of my options and their repercussions. He offered his professional advice best suited for my situation and he is amazing at his work. Thank you Jerry! :)
Stephanie Belanger
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