Major parts of the Canadian working population rely on payday loans British Columbia to make both ends meet on the financial front. With having no such means but to live from paycheque to paycheque, an approximate of 198,000 Canadians apply for such short term loans on a regular basis. It means over 54% borrowers use payday loans in British Columbia.
It is hard to say the fact that most individuals find it a tough battle to cope up with uncertain set of expenditures. And, left with no other choice but to resort to instant online cash advances against the next salary cheque.
But the thing to notice here is that many predatory lenders take advantage of this situation. They charge higher interest rate and allow innocent borrowers to get entangled in a never-ending zone of debt curse for a long-lasting time.
Thus, to protect the consumer affairs of people living in the British Columbia, the government has now regularized the phenomenon of payday loans and few genuine lenders are available to offer satisfactory fiscal aid at valuable rates.
Government Tighten the Regulations of Payday Loans
As per the new rules on payday loans in British Columbia, the Canadian Government has clearly stated the way of calculating the Annual Percentage Rate on such short term loans in a way easy.
The cost of borrowing $100 in payday loan was earlier $23. Now, it has been reduced to $17. On the other side, most lenders will ask you pay the rate of interest on the basis of APR, while the short term loan you have applied is for few weeks only. Then, how come the rate of interest is charged on an annual basis. Like for an example, a lender might tell you pay $15 as APR on a borrowing of $100. But if you calculate accordingly in terms of APR a formula which is Total Cost of Borrowing (C) multiplied by 100 and divided by the length of the loan term (T), and further multiplied by outstanding principal over the term of the loan (P).
APR = (100xC)/(TxP)
So, point here is ask your lender as to why charge APR on a maximum of 4 weeks of loan and that too for an amount anywhere in between $100 to $1500.
|Amount of Payday Loan||Total Interest and Fees on the Loan||Total Amount Owing (Loan Amount + Interest and Fees)||Your Next Paycheque (After Taxes and Deductions)||Amount You Have Left After Repaying the Payday Loan ($1,000 - $345)|
New Rules to Save for Predatory Lenders
Despite some transparency prevails in getting same day payday loans in British Columbia at flexible rates, still some lenders appear as real predators. They find you cannot pay the loan amount on time and have to deal with late payment charges, higher interest rate and ultimately falling under the dark realm of debt cycle. Also, with no other variable option but to apply for another payday loan to pay back for the previous one.
A majority of payday loan lenders make people below the poverty line as their latest prey and make them fall in the line of debt cycle for a long-time. (For additional context around maximum repayments, please review section 23 of the Payday Loan Regulation.)
Thus, it is important to understand the risk associated with such expensive loan offers, if you cannot payoff with the next paycheque that was decided earlier at the time of applying for the same. (New lending rules are effective now)
The Best Consumer Protection Loan Offer
The Consumer Protection body in British Columbia has clearly specified the in's and out's of getting a payday loan. And, ask everyone not to fall as a prey to the hands of greedy lenders asking for more and more instead of helping during the emergency. The regulatory body has issued license to only genuine payday lenders whom you can find easily only and apply for short term cash loan with having complete transparency prevailed.
Things to Take Care of Before Applying for British Columbia Payday Loans
After having all the detailed discussion above, it's time for borrowers to take necessary pointers in mind before actually heading for payday loan during acute fiscal circumstances.
1. Read the Fine Print
This thing might got hide by many payday loan lenders on the detail section that you have to sign an agreement for getting the loan. An agreement that states that you agree to give your next paycheque to lender in terms of settling the loan amount, even if is full money or lender asking for extra, if the principal amount is not fully met. So, you need to carefully read the agreement line by line and then sign it accordingly.
2. Stay Away from Unlicensed Lenders
There are many imposters spread in the online market of payday loans British Columbia. So, do cross check the same, before even giving your personal identifiable information to false lenders. Otherwise, you would fall under trap of losing something important. The best way to find the genuine lender is to check with local consumer affairs website or office.
3. Ask All the Questions
Ask, ask, and ask, before you say Yes to get a loan. Be sure to fully understand all about British Columbia payday loans before applying. Get to know in advance what is the amount of loan, associated fees, rate of interest, late payment fees, consequences of not paying the loan, and what is the cooling period of the loan. Also, be sure to get the copy of the agreement that you have signed at the time of applying for the loan. In case you do not get the agreement's copy even after asking, then leave the loan application and switch to another genuine lender.
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