Top Tips To Help You Escape From A Payday Cycle LoanFast Action Finance
Over the last several years, recession have impacted society one way or another and caused ongoing market turbulence. Its negative effects have affected many families who now have difficulty in making ends meet. There is a current unemployment rate of 7.2% that still plagues many Canadians, and the economy seems pretty grim at the moment. Thus individuals have begin to downsize their homes, work second jobs or even return to school, some have even search in vain for a new career to turn the tide. In such unfortunate circumstances, payday loans have become increasingly common as well as an easy solution that traps many people.
What are payday loans?
Payday loans are loans extended to struggling individuals or families who are strapped for cash to hold them over until the next pay date. These loans are also known as cash advances or payday advances. Additionally, payday loans are also often one of the available options for people who have bad credit scores. All an individual requires is his or her proof of income, identification and documentations of a recent pay stub to obtain a payday loan.
Unlike conventional or personal bank loans, payday loans do not require the standard credit check or other personal information for a loan to be secured. They do not need your credit information and the application process is often faster than usual. Payday loan applications are often approved immediately and applicants can leave with his or her loan minutes later, usually up to a sum of not more than $1,500. Payday loans typically have a two week limit with the interest and principle amount due fourteen days effective from the loan’s date.
The illusion of a charitable idea
Payday loans may sound like a charitable idea in theory, and the organizations that offer such loans are anything but generous. These loans often carry extremely high interest rates that go up to 600%! This could mean that a $2,000 loan will accrue $12,000 in interest in just a year. Although the terms of a payday loan are two weeks and not a full year, there is still a substantial amount of additional fees to the balance of the loan.
For individuals living from one paycheck to the next, additional fees can take up a significant portion of their monthly income. In more dire circumstances, the paychecks of certain individuals may not be enough to repay the balance of their payday loan and may even resort to take out a second one to pay off the first. This vicious cycle can easily ruin financial stability and costs thousands per annum.
Look for viable alternatives
There are always better solutions out there for individuals and families who need assistance to help make ends meet. For example, there is the availability of personal loans and these are great solutions to alleviate temporary financial troubles. Personal loans are nothing like a payday loan as it has more reasonable interest rates that stay within 4% to 8%. Also, personal loans have longer terms that extend to a full year or more. This allows borrowers to have more time to save up before needing to pay off the principle and interest.
Another solution you can look into is taking up car title loans. These loans are known to share certain similarities with personal loans. You simply use your vehicle that is paid off as collateral to secure a particular loan. Car title loans do not require prior credit ratings as a prerequisite. Hence, even borrowers that possess poor credit ratings can also obtain a title loan.
What you should know
Although many individuals and families hope to spend their lifetime without the necessity of financial assistance, sometimes seeking financial support is inevitable at some point of time. If you are stuck in a payday loan cycle or face a first-time money crisis, car title loans can be the right solution for you. With lower interest rates and longer terms, such loans can be paid off over an extended period of time and with a schedule that does not include inflated costs. If you ever find yourself wading across rough economic waters and don’t think you can make it to the surface by yourself, consider car title loan, not payday loan.
When you take out a car title loan, it does not mean that your car can’t be used anymore. It is pertinent that you maintain your car in prime condition, especially if it is brand new. You are free to use the car for any purposes without worrying about conflicts with your lenders.
At Fast Action Finance, we offer car title loans in Toronto that do not require prior credit checks. You can even get your loan approved through the phone as well as receiving the money within the hour on-site. Your loans from us are strictly confidential, secure and fast.