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Payday Loans

Payday Loans

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The payday loan business is very lucrative. The companies that are involved in this market benefit from the excessive interest rates and the charges they charge for their products, and it is not only the borrower who suffers. Payday lending companies have marginalized old private lending companies, which often governed by families, and charged fair rates and reasonable terms.

In many ways, payday loans are very profitable. If you quickly need a loan, payday loan companies do a great job when it comes to getting you cash. However, the annual rate they charge you is unheard of. Not only is that but if you miss a payment, there is fee that is added. In fact, there is usually an initial cost of borrowing. There are also administration fees; processing fees, audit fees etc

Costs to consumers are excessive and even abusive, but this is not the only problem. It is so easy to qualify for payday loans that traditional, local and private lenders have great difficulty staying on the surface. You see, as small private lending houses charge fees and rates that are much lower on their loans, they tend to get more information before funding a candidate. This means that approval will not be as easy or as fast (although, overall, it is a relatively quick procedure) that approval for a payday loan. Nevertheless, by borrowing from a private lender instead of a payday loan institution.

The rise of payday loan companies threatens the market for private lenders, and this is not good news for consumers. The world in which small or micro-loans come with tariffs and fees that far exceed the loan amount does not seem to be an ideal world, is it? Let us see what the alternatives to payday loans are:

1. Private Lenders

Private lenders are usually made up of local businesses. They represent a scattered market across Canada. Many of them offer secured loans as well as unsecured loans. They can provide loans against a property, vehicle, or similar asset at reasonable rates.

2. Borrow from a friend or family member

Borrowing from a friend or family member is not always an easy thing, but sometimes it is a necessity. Given the current market uncertainty and the high costs generally associated with smaller loans, this option should not be ruled out.

3. Have you tried to apply to your bank?

Banks do not always mix with unsecured loans; however, if you need money to make a purchase, the bank could give you the money. In this case, the loan will be secured against the purchase you make (for example, a car or a snowmobile).

4. Do you have a certain home value?

If you have a certain home equity, it will be much easier to find financing. You can probably get a line of credit or a second mortgage in order to meet your monetary wants. You can even refinance your present mortgage to get easy access to the amount of money you need.

5. Do not necessarily opt for a loan

This is an option that many neglects. Alternatives to borrowing include getting extra hours of work, finding extra work, asking for an advance on your payment to your employer, liquidating things you do not need, you have many options. Do not exclude them!

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