Payday loans continue to be a growing business in more than just America. The U.K. has seen its fair share of new payday loan companies and even Canada, a country known for its frugality, is on the rise.
The government is run differently, people’s wages are taxed at a much higher rate and most Canadians lived simply to stay within their means. Temptation has gotten the best of these people through the use of mortgages, personal lines of credit and credit cards usage. Being neighbors to the U.S. and watching the Americans sink into debt could have headed a warning. Listening to reports of the U.K. and the rest of Europe where more and more people are falling further into debt could have helped them make better decisions about the consequences to spending beyond one’s means. Simply stated, Canadian debt has grown faster than their income.
How do payday loans fit into this?
Like the U.S. and the U.K. residents, as debt grows, options for additional money help are limited. Canadians are turning to payday loans online and storefronts for short-term loans to help with bills. The Canadian Providences have set up regulations for the lender residing in their state and for those online who will be servicing loans via Internet.
Both lenders and borrowers are still expected to act responsibly with the loan transactions in order to protect both consumer and business. Most reports are addressing the rights of the borrowers and protecting them through regulations and best practices acts. The payday loan industry works hard to conform to the regulations, but loss of revenue from defaulted loans will keep the interest rates higher than other forms of third party money. Lending money to people with poor or no credit and who are usually living paycheck to paycheck is a high risk business. Payoff terms are quick in order to utilize the next paycheck. Long-term debt carries unlimited potential for late fees, missed fees, insufficient fund costs or being crowded out by additional debt. Defaulting on your loan does not make the loan go away. There will be additional credit consequences in terms of negative reports to your credit by collections agencies.
The temptation to overspend will now need to be replaced with debt recovery plans. No matter which country you live in, the purse strings will need to be tightened and the habit to spend will need to be laced by a new one for saving. Emergency uses of direct payday loans or re-spending available credit on cards may have to happen, but this practice can be curtailed with a savings account which can be used to cover those exact troublesome expenses.
Being in debt has nothing to do with good people verses bad people. People are people and wherever they live, there will be similar financial difficulties. Besides creating a savings account, working towards increasing your income will also be a debt solution to strive for.
Spotya! Online Payday Loans promotes responsible lending and borrowing practices. When emergencies pop up, look at all options available and chose the one which will work the best and have the least amount of repercussions in the end.
