Canadian Payday Loan
Payday Loans are so popular today that many countries are now opening their doors for such kind of credit service. In the United State alone, it is noted that 36 states have considered and acknowledged payday loans as legal, while the remaining states have banned and restricted companies from offering it. This phenomenon is also true with the Canadian payday loans. In fact, several Canadian payday loan companies are now popping up bringing some new loan offers and driving some consumerists, legislators, and regulators to bring out a number of questions regarding it.
One of the latest issues being raised about the Canadian payday loans is the question on the Canadian payday loan regulations. Perhaps, you've known about the news - and I hope you have - that the Canadian payday loan industry has uncovered a new code of conduct to protect the Canadian payday loan consumers and of course their money.
According to some reports, the Canadian payday loans, in general, are offered to the people as a form of short term loans, which generally cost a lot of money to get. The main idea for offering the Canadian payday loans is actually to help thousands of customers to bridge the gap between paychecks. For that, it is just a usual thing that the Canadian payday loan amounts typically range from $100 to $500 and according to some reports; it can cost $15 to $25 for every $100 to borrow, even if borrowing term is just a week. For many people and regulators, this condition may sound safe, but if you borrowed, say $200 for seven days at a cost of $50 that basically translates into an Annual Percentage Rate (APR) of more than 1,300 percent. And for them, 1000 percent is just fairly common.
Furthermore, it is noted in numerous reports regarding the Canadian payday loans that recently, the Canadian law states that the interest rates of the Canadian payday loans cannot be more than 60 percent per annum, and that is obviously more than 60 percent. Aside from that, a number of the Canadian payday loan companies up to these days have been extremely criticized due to the reason that people who apply the loans are often poor or desperate, and so there is a great possibility that they certainly should not be pulled to borrow at such high rates of interest. So the question here is how do the Canadian payday loan companies get around the 60 percent maximum annual interest law?
According to some reports, many of the Canadian payday loan companies today have fudge by means of tacking on the "brokerage" or "processing" charges. And, there are a few of the guidelines for the Canadian payday loans that are supposed to be accomplished. It is even noted that the guidelines, released by the Canadian Association of Community of Financial Service Providers, has specifically promised to prohibit the payday loan "rollovers". However, these guidelines include nothing about capping rates at a more reasonable degree that most of the credit counseling entities in Canada say that many of the Canadian payday loan companies will not even work with them to help correct a consumer's credit problems.
So perhaps the best solution for such problems is to stay away not only from Canadian payday loans, but from payday loans in general. After all, there are still some alternatives for you to borrow money, and one of those is to see a credit counselor in case that you are having trouble with money.