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The Absolute Truth About Payday Loans in Canada

The Absolute Truth About PAYDAY LOANS IN CANADA There is a lot of buzz around payday loans in 2015. Every online article & every television interview includes words like, "loan sharks", "APR in the hundreds" & "preying". The industry has seen big change in Canada & it can no longer be judged according to out-dated practices that used to exist. There are new players that want to change the game & play fairly. We're going to set this straight. GO DAY" FAST CASH. CLICK AND Go! Myth #1 "The APR is often over 500% That's more than a credit card!" Myth #2 "Every company allows roll over loans" This claim is based on a misconception - a really bad one & ends up being more of a scare tactic. Payday loans are based on your pay schedule, which for most is bi-weekly. It is simply not the nature of a payday loan to extend longer than 2 weeks at most, making this claim disingenuous. In Öntario, the cap is $21 per $100 borrowed. In BC, it's $23 per $100, thus interest rates of 21% and 23% respectively. Chalk this one up to huge differences in payday loan industries across the globe. The term "roll over loan" can mean two very different things. 1) A loan term that is extended if the customer pays an extra fee or 2) A second loan that is given before the first has been repaid. Both of these practices are prohibited in Ontario. With a cap on how much lenders can charge, the net revenue is a lot less than you might imagine. We're not pocketing 100% of that $21 per $100. Consider basic operating costs - salaries, benefits, rent, technology, licensing, hydro...the list goes on. We're not even getting into the bad debt portion of the business, which payday loan companies deal with in much larger numbers than traditional banks. Myth #4 "Payday lenders prey on low income earners!" Many companies, us included, simply will not lend within a certain income bracket because we support responsible lending practices. It doesn't do the customer any good if they get into a deeper debt cycle, and in complete honesty, how does it benefit a business if they can't collect on their loan? The truth is payday loan debt that is overdue accounts for a very, very small percentage of the total consumer debt load. Myth #3 "Payday lenders are rolling in money!" Direct vs Indirect Online Lending There is an increasingly large presence of payday loan companies online. While this is super convenient, not all companies are direct lenders (like us). Some are indirect lenders, that is, a specific type of service that matches you with a direct lender. Myth #5 "Cetting a payday loan will start a poverty cycle" Nope. The fact that lower- income consumers make up a percentage of payday loan borrowers (and that % varies significantly from company-to- company) does not mean that it's the payday loans they took out that got them there or that keep them there. Correlation doesn't necessitate causation. Myth #6 "Payday lenders are sharks". Sharks. They've got their own week on T.V. They've captivated the imaginations of authors & sailors alike. They've also got a pretty bad reputation. We're in payday loans, so we know what that's like. Funny thing about sharks? They're fast, intelligent & resourceful. They offer a valuable service to the sea. While some sharks should be avoided, there are others that can't even bite you. They're the shark you can swim alongside safely. Awe! We have feelings too, you know! GoDay.ca is dedicated to transforming the industry. We want to serve you & your financial needs with transparency & honesty. So if you want to call us sharks, that's fine. We're that shark. Come see how we're changing the ocean. GODAY But we're going to be cute about it.

The Absolute Truth About Payday Loans in Canada

shared by GoDay.ca on Jun 15
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Payday loans have gotten a lot of buzz in 2015. However, the criteria by which the industry is judged is out-dated and incredibly region-specific. Payday loan companies in the U.S, for example, are s...

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