Need a loan in Sarnia?

by Joel Sandwith on November 18, 2010

I’ve had a lot of meetings with people lately who have pay day loans from various places around Sarnia.  Now, these pay day loan places have their purpose, and the people working there need to make a living just like you and me, but I thought I’d write about this just in case it can help anyone out there avoid a major problem.

Usually pay day loans start out being a band aid to fix another problem – being short on rent, or the credit card payment is due on the 1st and you don’t get paid until the 3rd.  In these types of scenarios, a pay day loan may bridge that gap and let you get on with your life.  But what if that doesn’t completely solve the issue?  If you are completely broke two days or more before payday, who’s to say you won’t need another payday loan?  And once the pay day loan is paid, how do you live for the next two weeks?

Here’s an example:  you go to the local storefront pay day loan company to borrow $500, just to last until payday in three days.  You use the money to get caught up on bills.  Three days later, you get your paycheck, for $800.  Now you go back to pay your loan – and it costs you $600 (it might be more than that even – I’ve seen some folks pay $750 back on a $600 loan – $150 in interest in less than two weeks!).   So, now you have $200 – and it has to last you two weeks.  You’ve got other bills, gas, groceries, maybe even rent coming up.  What do you think the chances are you’ll need another loan, and pay $100, $150 or more just in interest and fees?  Pretty soon, you’ll need to borrow every pay day, and worse yet, might need more than one loan!

The worst case I ever saw was several years ago – a couple had gotten behind on their mortgage and used a pay day loan to catch up.  Paying that off led to being late with the credit card payment, so they got another loan.  They paid that off just in time for the next mortgage payment.  You guessed it, another loan.  Except this time, they were even further behind and had to go to a second lender for more money.  On it goes, until they were using four different pay day loan places every week, and paying interest and fees of over $500 each time – almost $2000 per month.  And no, they never did catch up on the mortgage, or the credit cards.  After all, like I always say, you can’t get out of a ditch by digging with a bigger shovel.

So, is this you?  Have you been using payday loans to pay credit card bills, or other living expenses?  Do you feel like you need a ladder but all you can see is more shovels to dig deeper with?  We can provide you a free consultation to find a better way.  Call us at Hoyes, Michalos, toll free at 310-PLAN (7526) – no area code required, or locally in Sarnia at 519-344-1058.  Let’s get started on a plan to really deal with those debts.

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