The consumer crusade against payday loans are actually a bit unfair. People have gotten caught in a powerful storm of owing money on a single loan from months or even years prior. Payday loans get a frustrating stigma attached against them. They had saved people that have been in a bad situation. They’ve also been used to do more harm than good. It is not the fault of the cash loans as much as is the fault of the person borrowing. It is the same adage that guns don’t kill people- people kill people.
Below are three common misconceptions about cash loans that frustrated the many Canadians that use them responsibly to get out of a jam. Payday loans are not for everyone, and they should not be used as the first option when the month is tight financially. But, understanding how they work is pivotal in understanding how to avoid these problems.
Payday loans are illegal
This is not true. Payday loans are perfectly legal and allowed in the country. This is not to say that there are shady payday loan providers that have a tendency to bend the rules. Any reputable company can be found in the exchange program and researched online.
Payday cash loans demand upwards of 100% interest
This can be true, theoretically, but it is not likely. Payday loan interest rates are higher than what are found in consumer credit cards and mortgages. This is because they use collateral to protect their lending. Payday loans do not have collateral involved at all. If the lender decides not to pay back the loan, all they have is a bad check.
A cash loan is just another bill
This is also not true. A payday cash 500 loan no credit check usually has a term of two weeks. This means that the loan needs to be paid back in full after the two-week period. Bills are usually paid on a monthly basis, which is twice as much as the average cash loan. These loans are not meant to just pad up monthly bills. They are used to pay something that needs to be taken care of immediately (broken down car, bail) and subsequently paid off before the other bills are even due.
It is consumers that use these cash loans irresponsibly that are giving the entire industry a bad name. Payday loans have their flaws high-interest rates being one of them. But, for some Canadians, they come in at just the right time.
Cash Loan 