Short-term Loans – Long-term Pain

Don’t Play ‘Their’ Game

Ever wondered what happened to ‘loan sharks’. You know, those shady guys that people would borrow a few dollars from and end up owing twice the amount in a very short time?

Most of them got squeezed out by short-term loan companies.

Short-term loan companies come in many flavours – some offer payday loans, some offer loans on collateral (usually cars), and some offer personal short-term loans.

Whatever the flavour – the interest rates charged are scary high – and can lead to a dependence on short-term loans. Repayment of these high-interest loans usually means that there is less money left to deal with the next emergency which leads to taking out more loans.

The good news is, they don’t use guys threatening to break your legs to get their money back – the bad news is they use collection agents.

But I NEED a Short-Term Loan

When people are desperate enough to use a short-term loan company – they don’t usually care that they will be paying the equivalent of 200% or 300% or even higher annual rates. They are focused on the need and not worried about ‘down the road’.

We get it. And if you only ever use these short-term companies once or twice, it is not the end of the world. But what we are seeing are increasing numbers of people with multiple, unpaid short-term loans who have been put through the wringer by collection agents and are at the breaking point.

No Way Out? Way

Of course there is a way out and usually multiple ways out – lets examine some:

  • If you are in too much short-term and other types of debt to ever be able to pay it off – you can file for bankruptcy or a consumer proposal to get out of debt.
  • If you are able to pay off your short-term debt – do it. Cut down on your expenses and/or take a second job until they are all paid off.
  • Set up an emergency fund so you won’t need short-term loans for emergencies. Cut down on your expenses and/or take a second job until you have a fully funded emergency fund. And then only use your emergency fund for real emergencies.
  • Set up a realistic and doable budget. Then cut down on your expenses and/or take a second job until all of your debts are all paid off. Stick to your budget, even after you have paid off all your debts.

Are you noticing a common theme here? Cutting expenses and increasing income to get your finances in order. It can be hard to do, but ultimately it is a rewarding way to take control of your finances.

Too Low an Income?

We all know that lower-income people are the main target of short-term debt companies.

But just because you are a target does not mean you cannot be in control of your own finances.

There are many people on low incomes who are not in debt, not getting collection calls, and enjoying their lives.

You Are Responsible for Your Own Finances

Don’t be a victim – take control of your finances – and get on with living your life.

 

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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