Payday Loans VS. Debt Consolidation – The Best of The Worst

So you need money and don’t get paid until the end of the week. You’ve tried the bank and they have turned you down based on your credit. The only solution that you can see is another payday loan. Well not true if you own your home. Then there are options. But what is the better route – Pay Day Loan or a Simple Debt Consolidation? I’ll let you be the judge…

Highest Interest Rates Possible

With a payday loan you will pay just under the legal limit of 60% interest – but this is not including the fees that are charged on top of this. Typically, you can expect to pay up to $100 in interest and fees for a $300 payday loan. The Financial Consumer Agency of Canada says that amounts to an effective annual interest rate of 435% on a 14-day loan. OUCH! This is going to hurt you if you do it even once. On the other hand if you were to look at a private mortgage loan or even a self directed RSP mortgage you would be looking at an average of 15% interest and much lower than the 60% with all fees included.

Band-Aid Solution

My personal beef with payday loans is the lack of  a long term solution. You borrow your future pay at an interest rate that puts you further behind come payday. The lack of a plan to work towards a better future is not included in the price of the loan. This is where a Simple Debt Consolidation is very different. We take a quick look at your whole situation and determine how to get you out of the ‘borrow from tomorrow’ cycle. Through a couple of quick questions we can determine where all your money is going and how to stop the bleeding permanently.

Credit Not Improving

I know that to the typical payday loan client – the fact that there is no credit check is a positive. But what about your future? If the borrowing does not contribute to a better credit score than you are guaranteed to be in this situation again. Payday loans are dangerous in that they will keep you paying the highest interest rates on all of your other debts as well. With a Simple Debt Consolidation we take all of your high interest credit card debt and roll it all into one loan. This ensures there is enough to get you through to the end of the month and by reducing your monthly payments we can keep you from going back to that negative cycle. The best part is that by paying off your other debts – your credit score will begin to improve giving you better borrowing options for the future.

So don’t wait until the next time a money crisis hits and you find yourself with more week than dollars – a Simple Debt Consolidation can save you from ridiculous interest rates, a band aid that keeps falling off, and a bad guarantee that you will be back to borrow again. I am here to help you get back on the horse and ride off into a sunny future. Hit me up below and I will get back to you asap.