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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Very knowledgeable, helpful and fast service
Anthony Mcfeat
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I am so delighted to have found this company. They are the best. Everyone in the office is very nice never to busy to assist you. Thank you David Sklar and Shirley and associates for being you. 😊🌺😊
Deborah
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Trina was amazing and quick. No judgement was made and they all made me feel I made the right decision. Would highly recommend them
Crystal Minaker
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Trina was very easy to work with. Any questions I had were answered promptly. What seemed like a complicated process was explained in a clear manner that wasn't at all intimidating. It made for a more comfortable experience during a turbulent time.
Eldon Aubie
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Jackie is very professional...I would recommend David Sklar to anybody especially knowing how understanding they are.
Kimberley Lyder-Niles
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I had Shirley and Kim take care of my finances. From the very first moment I spoke with Shirley I could sense how caring, professional and patient she was. She was also very understanding with my lack of financial knowledge and never made me feel dumb as some other companies have.Her and Kim were always very quick to respond to emails, always available if I called and answered my abundance of questions in such detail that I now believe I have a thorough understanding of how finances work. I am hopeful about my fresh financial start and very grateful I had the privilege of meeting and working with these two beautiful women.I also spoke briefly with Richard over zoom and he to was extremely friendly, patient and made sure I was well taken care of.I could not recommend David Sklar and Associates more. Thank you again.
Shayleen Muzi
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Good professional team! Jennifer is the best, helped me through everything and answered all my questions. Made the process easy! Would recommend Jennifer and the team at David Skylar.
gary round
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Christine and her team are amazing and professionals. I called for help and she responded right away to help me.thank you and I really appreciated for everything you do.
Marcelina Sunas
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Thank you so much for the helpYou took away the most stressful things in our lives which was our dept you guys are amazing and would recommend you to everyone
Kaitlyne Sunas
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The staff here are fantastic (Cori handled my visit) and are willing to go above and beyond to help people who need help, I recommend them 100% for people who are looking to move on in good standing.
Vito De
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