Why are PayDay Loans a disaster?

There’s hardly anything more frustrating than working hard at your job, coming home tired and yet, you sometimes find that you can’t cover a large expense. It’s this very frustration that typically leads to the dreaded payday loan.

The reasons more Canadians don’t have an emergency fund in place are many. Life keeps getting more expensive, some economies (like Alberta’s) tank in the blink of an eye and people are too busy managing the fallout to establish a rainy day fund.

If you’re a Canadian with an imperfect credit score, you have no substantial savings and you suddenly find yourself in a situation where you have to cover a large expense you weren’t expecting (such as emergency dental care, for example), you might be tempted to take out a payday loan.

It’s during these tough times that we discover that banks are NOT our friend and that their stalling only makes whatever dire situation you need a loan to cover worse…only to decline you.

The companies who want to sell you a payday loan know exactly how much pressure and stress you’re under and they have no problem taking full advantage of your dire circumstances and locking you into a situation that could result in a need to borrow even more money.

What some Canadian provinces are doing about payday loans

A pound of flesh…

The only true criteria for a payday loan lender is that you have a job and that you are the age of majority. They don’t care about credit history, but with that being said, they also don’t offer a whole lot. In some cases, $1000 is the most you can expect and that might not cover whatever you’re trying to solve.

Seeing as how you’ll be expected to pay as much as $21 for every $100 you borrow, the game is slanted so that you can’t possibly meet the 14-day deadline to repay the principal AND the interest with your next pay cheque.

They don’t want you to succeed in doing that – that’s not where the money is with the payday loan industry. It’s the penalties for late repayment that bring in the real profits.

Once you find yourself in the penalty zone, the disaster begins. Every pay cheque you have to pay more exorbitant interest, without ever being able to clear the remaining money owed in one shot.

Ultimately, you can find yourself paying as much as $500 for every $100 borrowed. Could actually get worse if, God forbid, you encounter another emergency that calls for a large sum of money – and this does happen.

Another way in which the payday loan cycle extends itself is when a borrower finds himself desperate – so desperate – that without thinking things through, takes out a payday loan with another company to settle the original debt…without considering that he’s only extending his problem.

The Payday Loan Industry vs. The Law

The notoriety of the payday loan industry and its predatory lending practices are today getting much-unwanted attention from both the press and the government alike. Social groups have been adding tremendous pressure on lawmakers to regulate the industry and it’s working – but not quickly enough.

There is only so much the government can do, but they can’t legislate the worst aspects of the payday loan industry away.

Alternatives to taking out a payday loan

Even if you get declined by a conventional bank for a loan, you do have options other than taking on a payday loan.

That option comes in the form of a private term loan and repayment can be as low as $50 a week. Private lenders work somewhat similarly to banks except that they’re nowhere near as rigid with their application process and move A LOT faster with approvals.

The only criteria you have to meet to qualify for a private loan:

• You must be of legal age
• You must be employed
• You must be a permanent Canadian citizen
• You cannot be in the midst of bankruptcy

With LoanAway, a popular private lender, your application for a loan can be approved in just a couple of hours and once approved, you could receive that money as quickly as 24 hours later.

You could also qualify for a loan of up to $5000, which you can repay over a period of as long as 36 months. That sure sounds better than the hell of doing business with the payday loan industry, doesn’t it?

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Can you achieve you achieve a perfect credit score after damaging your credit? The answer is ‘yes’ — but there is a caveat: you’ll have to be patient. Think of your quest to bring your score up to perfect to be the same as the road to recovery after a severe accident.

In other words, it’s going to take patience, determination and commitment.

Why is it worth your time to attempt to get a perfect credit score?

Because you never know when occasions in the future will FORCE you to seek borrowed money – whether you want to or not. It could be anything – an urgency, perhaps you’re about to welcome an unplanned addition to the family.

It could be any number of reasons – and in this article, we’re going to give you the steps you need to follow to make sure you’re ready for any financial surprises that come your way.

Just in case the thought has crossed your mind – NO, it is not too late to repair your credit.

We’re going to tackle your credit repair challenge in a few simple steps:

Step #1: Keep your credit cards under control at all times

If your card is maxed out and you’re starting to repay the outstanding balance, there is a mental conditioning exercise you must adopt: the available cash is NOT available…even though it is.

Whenever you get the idea that you could buy something because there’s cash available on your card, learn to tell yourself that you do not in fact have that cash, because it isn’t cash. It’s an obstacle that stands between you and your perfect credit score.

The easiest way to avoid this challenge is to bury your card somewhere where it’ll be out of your sight.

Step #2: Reduce

Know how you often here world-renowned investors (such as Warren Buffett) preach that diversify your assets is the smartest strategy to growing wealth? Well, to achieve a perfect credit score, you have to approach credit cards with the opposite approach.

Credit cards are not assets – they’re a liability and grouping liabilities in one place is a great way of controlling debt and driving to your goal of a perfect credit score.

What qualifies as a great credit score you may ask. Here’s a link for more information on credit score.

Step #3: Never miss a step

Most debtors assume there’s not a whole lot wrong with delaying the payment of a bill until a further date and that the bottom line is that the payment is made, just not right away. Wrong.

Every time you don’t make a payment on time, it dings your credit rating. No matter what, the key to a perfect score is to make sure you have the required funds set aside to always pay those bills on time and stay in their good standing.

Step #4: Embrace “good debt” with open arms

Sometimes people get bad advice that leads them to believe that all records of debt should be stricken from their credit report. That somehow, borrowing money in the past looks bad. This is a myth.

If you took out a car loan and repaid it with consistent payments that were all made on time, future creditors love seeing that kind of financial activity. You’ve demonstrated that you can take out a loan and repay it on schedule as agreed – why would you want to remove that from your record?

Step #5: Play ‘hard to get’

The credit industry is one of the most lucrative for many non-traditional lenders to get into (think department stores). Just because the offer appears like an easy one to go with, doesn’t mean you should take it.

You can give prospective lenders the idea that you’re shopping for credit – it just looks bad and lenders are far more attracted to borrowers who aren’t easily interested in loaned money.

How Long Will It Take?

As you can see, we’ve laid out just five steps here and those five steps, if followed to the letter could bring your credit score up from poor to good within 12 months. If this is preventing you from getting a loan, Loan Away can help you with getting an online loan qucikly

Of course, the situation is different for everyone, but this system will make a substantial difference in your credit standing, no matter what.

Now, 12 months might seem like a while, and depending on your circumstances, it very well could be, but that is why you need to look at achieve the perfect credit score as a marathon and not a sprint.

It’s all about embracing positive new habits you’ll keep for life and which will ultimately enrich your life.

Did You Know…that LoanAway can help you with your goal of achieving the perfect credit score? Many of our customers have successfully borrowed money from us for the express purpose of boosting the quality of their credit rating.

To find out how we can help contact one of our specialists today

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Financial Stability: The steps you need to take

Chances are you haven’t met too many people whose goal in life it was to wind up poor and struggling to make ends meet. But when you get right down to the brass tacks of why people who are enduring cash problems, it essentially boils down to 7 common areas of money management.

Financial stability hinges on one very key skill: organization. With the right plan in place, you really can work wonders with money, even if you don’t have as much of it as you’d like.

If you’ve made your share of financial mistakes in the past, use this guide to figure out what your money management profile is. Everyone has a different perception of financial stability, and if could be that you’re taking more risks than those who are more stable than you are.

So if you’re not in the financial situation you wish you were in right now, we’re going to share with you the 7 PROVEN strategies that will take you from financial struggle to being in a position to make serious investments that will enrich your future.

Financial Stability Step #1: Save money

Yes, that’s right – the most basic advice you’ve ever heard. You got to understand the basics before moving on. Here is some more information. But here’she thing – if you’re living pay cheque to pay cheque, not having savings is a very perilous situation to be in. Depending on who you speak with, some would recommend that you sock away between 10% to 30% of your monthly income.

To get an idea of how far this can go, speak with an adviser about compound interest. With $1000, you could easily find yourself over $25,000 within 25 years, and you’re not doing anything to earn that extra money.

Financial Stability Step #2: Budget yourself

One of the leading culprits to financial disorder is not having an account of where the money went. When you write yourself a budget and stick with it, you spend or save money in a controlled manner that will keep you from veering off the rails.

The key to proper budgeting it to list all of your unavoidable monthly expenses (rent, phone bill) and working with what’s left after that. The sum that’s left over the exact amount of money. If you chose to follow point #1 designate part of your monthly income to savings, make sure to subtract that as an unavoidable monthly expense.

Financial Stability Step #3: Create an emergency fund

We repeat this mantra very often here at LoanAway: “Life Happens”.

You do not get car damage that requires $1500 every day, but it can happen, and when it does, it can happen at the very worst of times… like 3 days before rent. You need a car to get to work, but if you don’t pay your rent, you risk losing your home.

This is why an emergency fund is so imperative to your life. Even if you commit to $30 a month, after a year, you’d have $360 you could dip into if a sudden situation popped up.

Financial Stability Step #4: Pay all your bills regularly, consistently

This ties into all of the previous points. So many consumers have the mistaken impression that you only get blackmarks on your credit report if you default on your phone bill, electricity bill or credit card bill.

They believe that so long as they pay the money they owe, when it’s convenient to them, they’re in the clear. Most creditors will be quick to pick up the phone to report late payments and not only that – these late payments can carry penalties that dig into money you could be setting aside and growing for the future.

Financial Stability Step #5: Keep your credit strong

A strong credit score is your key to having ready access to fast cash at a moment’s notice or large loans for major purchases (such as buying property). Lenders need to know they can depend on you and when they can, you’ll be able to get a financial boost almost every time you want it.

Financial Stability Step #6: Don’t let multiple debts control you, you control them

Even if you’re a fairly responsible individual, juggling too many balls could lead to trouble. Say you have up to 3 credit cards and you whip them out at random, no rhyme or reason – no card is for any specific type of purchase. What you’re getting into is ‘nuisance payments’, which credit bureaus frown upon.

Also, if you have multiple credit cards and they all have different repayment dates, you run the risk of being late with your minimum payments.

This can lead to you controlling when you go on vacation. For vacations, Loan Away offers the best vacation loan in Canada.

Financial Stability Step #7: Consider a side-gig

Let’s assume you’re pretty accustomed to your salary, and can now manage, with the help of these steps, the money that does come in. Another pay cheque comes in and you save and spend the amount according to plan.

So what if you picked up a side-gig that could bring in anywhere from an extra $100 to $500 a month? If you’re comfortable with your existing income, this side-gig money could be pure savings, which are easy for you to store away because you didn’t have them beforehand.

So there you have it – these 7 steps to financial stability really aren’t rocket science, are they? Just good old common sense that has separated the wealthy from the rich throughout time. Which of the two would you like to be?

Another tip: You might also want to look into applying for a loan that will give you a heard start on stability in the form of a lump sum.

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