Living PayCheque to PayCheque?
If you’re living pay cheque to pay cheque and worry about running short on money to cover your expenses, a pay day loan can seem tempting. However, it’s important to understand the high interest rates and charges that come with pay day loans. You could easily end up paying far more for a pay day loan than any other type of loan.
In addition to interest rates, many pay day loan companies charge a number of different fees for using their services. These can very quickly add up to a lot of money.
For example, a pay day loan company in British Columbia was recently found to be charging customers extra fees to load the loans onto debit cards before cashing them. This fee was charged on top of the interest rates. While pay day lenders in British Columbia are unable to charge higher than 23 per cent interest per month, a CBC investigation found that some people are paying much more when additional fees are added into the costs. CBC News found that at least one person was paying approximately 35 per cent in interest each month.
As you can imagine, those costs quickly add up.
Avoiding Pay Day Loans
If you find that you often end up short of money when you need it, it’s important that you put together a budget to control your spending. Write down a list of everything you spend money on and see where you can cut costs.
Do you buy coffee at a coffee shop each day? You can save a lot of money by making coffee at home instead. Do you currently pay an expensive cable or mobile phone bill every month? You may need to cut some options and downgrade your services to something more affordable. The goal of your budget should be to spend less money than you have coming in so that you won’t find yourself short of money at the end of the month.
Pay Day Loan Alternatives
If you need money suddenly for any reason, such as added expenses like home or car repair costs, for example, you should look into other options for loans. There are a number of pay day loan alternatives that can get you the money you need at a much lower cost than a pay day loan.
You can look into car title loans, bad credit loans and a number of other types of loans to help you out. All of these loans are much cheaper than pay day loans, which means you’ll be able to get back on your feet much faster.
If you find yourself drowning in debt or living paycheque to paycheque , our drowning in debt blog can give you some ideas that will help you.
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