A payday loan is a relatively small amount of short term loan at a very high interest rate. You can borrow up to 30% of your pay as shown on your most recent pay stub, up to a maximum of $ 1,500. The maximum amount that can be charged in interest charges is $ 15 for every $ 100.
Payday loans are touted as a solution to help cover your expenses until your next payday. Although it may seem practical, this solution is extremely expensive. Before taking out a payday loan, think about the cost of borrowing and all of the other options available. Reassess your budget to see if it can be changed to make sure you don’t run out of cash before your next paycheck.
No payday loan company can offer or arrange to provide payday loans to residents of New Brunswick without being licensed. Online lenders should also be licensed and follow the same rules as in-store lenders. Contact FCNB to confirm that a payday lender is licensed.
Alternatives to payday loans
Before taking out a payday loan, consider other options. Tapping into your emergency fund, paying with a credit card, or borrowing from a friend or family member can be cheaper and safer than taking on new debt. If you take out a personal loan when your financial situation is difficult, you risk getting into more debt. You might consider other solutions such as negotiating with your creditors, discussing overdraft protection with your financial institution, taking out a small personal loan or line of credit, requesting a payday advance from your employer, or working overtime. . .
What is the cost of a personal loan?
In New Brunswick, the maximum you can be charged for a payday loan is $ 15 for every $ 100 borrowed. A payday loan is a very expensive way to borrow money. When you take out a personal loan, you pay high fees, the interest rate is higher than on a regular loan or line of credit, and you may have to pay fees if a check is bad or an automatic debit. . is rejected. Because of these high fees, it can be difficult to pay off a payday loan.
Paying off a payday loan
Usually, you have to pay off the payday loan on your next payday. However, you have the right to prepay or prepay the outstanding balance at any time without additional charges or penalties. You can also make partial prepayments without additional fees or penalties, on any fixed payment date. You will have to pay the cost of the loan (maximum of $ 15 for each loan of $ 100) even if you pay off the loan before the due date. These conditions should be clearly explained in all payday loan contracts.
Failure to repay your personal loan on the due date can have serious consequences. Your debt could cost you even more due to insufficient fund charges and accrued interest, and your credit rating could suffer. You can quickly fall into a debt spiral. Before taking out a personal loan, make sure you can repay it on or before the due date.
This content was originally published here.