What are the risks of borrowing payday loans in Canada?

Think twice before borrowing a payday loan

When you are living pay cheque to pay cheque, any small financial problem gets magnified. A payday loan without a credit check cash advance seems like the only way to get you through your short-term financial crisis; however, you wind up mortgaging your future for a quick solution to today’s problem without solving your financial distress in the long run.

When you take out payday loans you face several critical problems

You get caught in a debt cycle – The biggest problem with a payday loan is that it gets you caught in a debt cycle that is nearly impossible to break. You take the loan because you need emergency funds, but the loan is due in full the next time you get paid, and the money comes directly out of your account in most cases. Now the bulk of that pay cheque evaporates to pay for the loan amount, and the extremely high interest rate. As a result, most people who take out one payday loan will need to take out another within weeks.

No long-term plan – A cash infusion from a payday loan no credit check cash advance gives you money almost immediately, but it does not force you to confront the bigger problems that necessitated the need for the loan. Most borrowers continue to spend at the same level, never addressing the rest of their debt load or financial obligations in a way that provides a solid financial future. For this reason, you will never be able to start saving a nest egg to protect yourself in future financial emergencies.

Your credit score will tank – Finally, reliance on payday loans is usually a sign of deeper financial distress, which only grows worse when you spend all of your free cash on payday loan fees. Your bills will fall further and further behind, damaging your credit score to a point where you will be unable to get loans for bigger expenses, like a used car, or even prohibit you from moving to a new apartment. Credit scores affect more than just credit cards and mortgage rates; they have a significant impact on your financial well-being.

Use your money wisely, cut your expenses, search for alternative sources of income and look to sell unused belongings before even considering a payday loan, because even one can be financially catastrophic.

payday loans may be an unwise financial decision