You should avoid borrowing and re-borrowing with payday loans. Consider the following ways of borrowing money that are less expensive than a payday loan: cash advances on credit card, a line of credit or personal loan with your financial institution, going to your employer for a cash advance or to cash in vacation days.
Is It Better To Get A Payday Loan Or Get Cash On Your Credit Card?
The costs shown above assume:
- A payday loan with a cost of $15 per $100 borrowed, which is the same as an annual interest rate of 391% if you get a paycheque every two weeks
- A line of credit includes a $5 administration fee plus 7% annual interest rate on the amount borrowed
- Overdraft protection includes a $5 fee plus 19% annual interest on the amount borrowed
- A cash advance on a credit card includes a $5 fee plus 21% annual interest on the amount borrowed
Financial borrowing examples courtesy of the Government of BC site
More information on Payday Loans:
- What is a payday loan?
- Where can I get help to pay off my payday loan?
- Is a payday loan eligible for debt consolidation?
For more information on payday loan repayment options, please contact us to discuss your situation with one of our Credit Counsellors. The consultation is free of charge.
If you have more questions about your debt, you can also check out our Questions page where we have answered many common questions about debt and your everyday life.