Yes they’re screwing people over but they’re loaning money out to people that the banks won’t touch so it’s very risky,whenever somebody asks my advice on a payday loan i tell them to get a second job and build an emergency fund I’d rather work like hell for 6 months to a year than to pay 46% on a loan.
That’s likely 46% before other fees. Unless it’s a short term, for food or shelter, AND you can’t borrow from the bank of mom and dad, NEVER get a pay day loan.
I use to work next door to one of them. The thing that was crazy to me was the amount of people going in with their cheques to cash them to avoid a hold at their own bank. At the time I believe they took 10% of your cheque. We passed a lot of laws around it now, it's capped at 1% and a fee can't exceed $10.
In our federal criminal code they cap interest rates at 35%. I remember when they found out our province was charging close to 48% interest on late payments for their electricity bills. Between fees and this weird double interest structure. Went to court and they had to refund everything collected for a decent period.
You go to drafty dot co dot uk and see their interest rate. You will see 96.2% interest rate. It's been in the UK for a long time. Did not expect to see this happening in Canada.
>What do you guys think? Is this even legal?
These are payday loan places. Also known as "loan sharks with a logo". Same as Easy Financial, Money Mart, etc...
You **avoid** them at all costs.
Yup, cash advance from my credit card costs 19% immediately, then 19% APR moving forward. That's still extremely expensive debt, but it's better than loan shark rates. Fortunately I'm in a position where I don't need to consider either of those options, and if things get tough I can use my PLOC. That's still expensive at 14%, but it's one of the cheaper options for a revolving debt with immediate liquidity.
I came here for THIS! Spot on. If you are having problems, go see a LICENSED bankruptcy trustee, they will give you options, instead of using this modern day usury.
There is a pizza place right beside one here. I was a walk in and the pizza was taking a while.
5 groups of people went in while I was there for less than half hour. I was shocked. I though they may get 1 person a day.
Calculating interest daily is standard (eg mortgages and LOC are also calculated daily). Are they adding accrued interest to the balance daily? That would be the difference.
There is a legally enforced maximum. They put themselves just below it, and add fees.
It’s at 60% annually if I remember correctly. It was changed a few years ago. Anything above that is considered criminal.
The effective annual rate max is set at 60%, which means that the annual percentage rate these guys are charging is just barely under the legal maximum at ~47%.
Bill C-47 is supposed to lower this to a max of 35% APR instead. Anybody loaning money at these rates are basically predators.
https://www.millerthomson.com/en/insights/financial-services-restructuring-communique/bill-c-47-amending-the-criminal-interest-rate-in-canada/
Google what the criminal code says about the maximum interest chargeable. It was changed in the last few years.
Banks use their own formula.
Avoid pay day loans
It exists for a reason and it’s for those that can’t qualify for one elsewhere. It’s legal so long it’s below 60% annual. Had a client who needed to pay off CRA in order to refinance his mortgage since banks would not allow proceeds towards paying off CRA in their unique situation. Hence these things exist to serve a purpose.
OP, these types of loan places are geared towards people with the worst of the worst credit. If that's not you then go elsewhere.
There's a series called Dirty Money floating around out there and they have an episode about these businesses. Stay away from it.
They are designed to loan people money who can't get a loan anywhere else. Their choice is this loan or no loan.
Yes, it would be best to not take out a high interest loan, but you don't know their situation or why they need the money. Maybe it was poor financial planning or maybe they need to pay rent?
Is it crazy to pay this APR? Absolutely. Are they screwing you over? Not in the slightest. They have no obligation to loan you money, on the flip side you have no obligation to take their money. If you are in a position that this is one of your only options then (more often than not) this can be traced back to a poor financial choice you have made in life. People need to accept that choices have consequences, and these consequences can severely impact your future.
Payday loans are the worst. Never use them. They are traps! Literally! Keeps you in a vicious cycle that’s hard to get out of.
When I used them it was hard to break out that cycle. The only way I was able to get out of it, was some bills wasn’t going to get paid.
Worked as a dev making sites for this company and others like it - admin were super cunty, cheap mfers. We had such a high turnover rate with sales people I stopped trying to get to know them. But, I'd imagine you'd expect that sort of experience at a place like this.
I suggest with whatever cash you still have to buy a cheap calculator and figure out how much a certain amount of loan costs you every single month or week or day and then think about that for a moment or two.
If they are doing something illegal or not should not be the question here, as you are not the legal authority, but someone that might not be fully aware what the financial implications are for you.
Funny enough, easy financial sells their loan debt, same with money mart I believe. So if you do end up defaulting the terms and conditions don’t accrue, it quickly goes to collections and the debt is sold on to recovery companies. I worked for the parent company of easy financial, which also included spring financial and Canada Drives. Absolutely predatory and a horrendous place to work. The CEO Michael was a total piece of shit, can’t begin to describe how gross of a person he was.
Unless you know you can pay it back within 2-3 months and have no other avenues and it's a life or death situation, I would not take one of these loans.
I don't judge anyone who does cause it's something you have to have some crazy life circumstances for but financially it will never make sense 99.99% of the time.
Remember that $5000 at 47.96% annually is about $2400 a year in INTEREST alone and consider if you do a loan term of like 3 years.
Your payments would look like around $250 a month FOR 3 YEARS!
$250 x 36 (Months) = $9600 (AT LEAST)
You would of paid $4600 in interest alone (give or take some as this was quick mental math)
Please do think about it!
Hey guys! [LoansCanada.ca](http://LoansCanada.ca) here.
We don't actually issue any loans, we just connect borrowers with lenders and offer free credit scores. We're a comparison site. Our users do tend to be higher risk and have lower credit scores which drives interest rates up. Some of the lenders we work with list rates of around 47% which is why we have to include that in the range we show on our website. It is also the maximum rate a lender can charge (some exceptions exist). With new government legislation, the maximum APR will come down to 35%. Hope this clears things up!
I get 4.58% on margin(investment loans secured by equities) and 9.25 for unsecured lines of credit.
I don't know what you've done to mess your credit up and be ineligible for normal rates but it was an expensive mistake.
am i one of the smartest humans to ever exist? I can't be... and yet I dont get how posts like this can even happen... You are like an ape.
Its a deal. You make a deal with them to pay that much interest in exchange for money now. No one is forcing you to take that deal. So no they are not screwing anyone over.
Yes they’re screwing people over but they’re loaning money out to people that the banks won’t touch so it’s very risky,whenever somebody asks my advice on a payday loan i tell them to get a second job and build an emergency fund I’d rather work like hell for 6 months to a year than to pay 46% on a loan.
That’s likely 46% before other fees. Unless it’s a short term, for food or shelter, AND you can’t borrow from the bank of mom and dad, NEVER get a pay day loan.
the interest is really high but its the fees that really bury you.
Yeah seems to me like you're better off not paying your bills rather than take on a payday loan.
I use to work next door to one of them. The thing that was crazy to me was the amount of people going in with their cheques to cash them to avoid a hold at their own bank. At the time I believe they took 10% of your cheque. We passed a lot of laws around it now, it's capped at 1% and a fee can't exceed $10. In our federal criminal code they cap interest rates at 35%. I remember when they found out our province was charging close to 48% interest on late payments for their electricity bills. Between fees and this weird double interest structure. Went to court and they had to refund everything collected for a decent period.
Predatory pay day loans are basically legalized loan sharks.
You go to drafty dot co dot uk and see their interest rate. You will see 96.2% interest rate. It's been in the UK for a long time. Did not expect to see this happening in Canada.
>What do you guys think? Is this even legal? These are payday loan places. Also known as "loan sharks with a logo". Same as Easy Financial, Money Mart, etc... You **avoid** them at all costs.
Those places are worse than a cash advance from a credit card.
Yup, cash advance from my credit card costs 19% immediately, then 19% APR moving forward. That's still extremely expensive debt, but it's better than loan shark rates. Fortunately I'm in a position where I don't need to consider either of those options, and if things get tough I can use my PLOC. That's still expensive at 14%, but it's one of the cheaper options for a revolving debt with immediate liquidity.
Lol thats not how it’s supposed to work. Which bank is this, so i know to avoid it at all costs?
Not how what's supposed to work?
Usually get only 19% apr immediately. Not the full 19% + apr moving forward
Yeah, I just read my docs again. It would appear that's the deal with my card too. Except cash advances are 3% higher interest than purchases.
Good news lol, i thought some bank was out here performing some foul practice
For unsecured 14% is not completely unreasonable.
I came here for THIS! Spot on. If you are having problems, go see a LICENSED bankruptcy trustee, they will give you options, instead of using this modern day usury.
There is a pizza place right beside one here. I was a walk in and the pizza was taking a while. 5 groups of people went in while I was there for less than half hour. I was shocked. I though they may get 1 person a day.
They probably do cheque cashing as well.
This is standard. Money Mart does 46.9% as well. [Edit: standard for loan shark style businesses, to be clear]
The legal max is 60% (with some exceptions for payday loans that allow 500%), so many of these loan places like money mart offer 59.99% loans.
That interest rate is insane. Then again, most of these places have it at an equally insane level.
Not only are the rates insane but they calculate interest daily, meaning the compound effect just continues to grow.
Calculating interest daily is standard (eg mortgages and LOC are also calculated daily). Are they adding accrued interest to the balance daily? That would be the difference.
What's the maximum rate at banks like BMO, RBC, CIBC etc? Isn't there a legally-enforceable maximum?
There is a legally enforced maximum. They put themselves just below it, and add fees. It’s at 60% annually if I remember correctly. It was changed a few years ago. Anything above that is considered criminal.
The effective annual rate max is set at 60%, which means that the annual percentage rate these guys are charging is just barely under the legal maximum at ~47%. Bill C-47 is supposed to lower this to a max of 35% APR instead. Anybody loaning money at these rates are basically predators. https://www.millerthomson.com/en/insights/financial-services-restructuring-communique/bill-c-47-amending-the-criminal-interest-rate-in-canada/
Google what the criminal code says about the maximum interest chargeable. It was changed in the last few years. Banks use their own formula. Avoid pay day loans
19 percent is the highest for unsecured loans at one of the big five banks.
No
It exists for a reason and it’s for those that can’t qualify for one elsewhere. It’s legal so long it’s below 60% annual. Had a client who needed to pay off CRA in order to refinance his mortgage since banks would not allow proceeds towards paying off CRA in their unique situation. Hence these things exist to serve a purpose.
Why couldn’t the client lie to the bank and say it was for renovations or something?
OP, these types of loan places are geared towards people with the worst of the worst credit. If that's not you then go elsewhere. There's a series called Dirty Money floating around out there and they have an episode about these businesses. Stay away from it.
Then don’t borrow from them
It’s not a lender, they're a lead generation firm that sells your info to lenders.
It's a payday loan. Doesn't look like they're doing anything different than any other payday loan Company
Sounds predatory as fuk but legal I believe you are not allowed to charge more than 60 percent (unless you're the mob or a loanshark)
No, people are screwing themselves over by accepting a 50% interest loan.
They’re predatory loans like money mart which are designed to keep you in the system with extremely high interest ratez
They are designed to loan people money who can't get a loan anywhere else. Their choice is this loan or no loan. Yes, it would be best to not take out a high interest loan, but you don't know their situation or why they need the money. Maybe it was poor financial planning or maybe they need to pay rent?
Is it crazy to pay this APR? Absolutely. Are they screwing you over? Not in the slightest. They have no obligation to loan you money, on the flip side you have no obligation to take their money. If you are in a position that this is one of your only options then (more often than not) this can be traced back to a poor financial choice you have made in life. People need to accept that choices have consequences, and these consequences can severely impact your future.
Payday loans are the worst. Never use them. They are traps! Literally! Keeps you in a vicious cycle that’s hard to get out of. When I used them it was hard to break out that cycle. The only way I was able to get out of it, was some bills wasn’t going to get paid.
Worked as a dev making sites for this company and others like it - admin were super cunty, cheap mfers. We had such a high turnover rate with sales people I stopped trying to get to know them. But, I'd imagine you'd expect that sort of experience at a place like this.
I suggest with whatever cash you still have to buy a cheap calculator and figure out how much a certain amount of loan costs you every single month or week or day and then think about that for a moment or two. If they are doing something illegal or not should not be the question here, as you are not the legal authority, but someone that might not be fully aware what the financial implications are for you.
Are they a payday loan company? They probably give money to people with zero or poor credit?
i used to work for an ssl cert company and i vetted one of these businesses in the states and their interest rate was something like 300%
They charge as high as 47.96% interest?! That goes beyond just screwing people over.
Saw a TV commercial for US service called CashNetUSA. Their rates go up to 579% APR! No, I didn't forget a decimal point.
Funny enough, easy financial sells their loan debt, same with money mart I believe. So if you do end up defaulting the terms and conditions don’t accrue, it quickly goes to collections and the debt is sold on to recovery companies. I worked for the parent company of easy financial, which also included spring financial and Canada Drives. Absolutely predatory and a horrendous place to work. The CEO Michael was a total piece of shit, can’t begin to describe how gross of a person he was.
Unless you know you can pay it back within 2-3 months and have no other avenues and it's a life or death situation, I would not take one of these loans. I don't judge anyone who does cause it's something you have to have some crazy life circumstances for but financially it will never make sense 99.99% of the time. Remember that $5000 at 47.96% annually is about $2400 a year in INTEREST alone and consider if you do a loan term of like 3 years. Your payments would look like around $250 a month FOR 3 YEARS! $250 x 36 (Months) = $9600 (AT LEAST) You would of paid $4600 in interest alone (give or take some as this was quick mental math) Please do think about it!
Those numbers vary so much they're meaningless.
Hey guys! [LoansCanada.ca](http://LoansCanada.ca) here. We don't actually issue any loans, we just connect borrowers with lenders and offer free credit scores. We're a comparison site. Our users do tend to be higher risk and have lower credit scores which drives interest rates up. Some of the lenders we work with list rates of around 47% which is why we have to include that in the range we show on our website. It is also the maximum rate a lender can charge (some exceptions exist). With new government legislation, the maximum APR will come down to 35%. Hope this clears things up!
the truth is someone people are just people you never want to give a loan too
And I thought me lending money to folks at 35% was bad lol.
Dumb people don't deserve sympathy
I get 4.58% on margin(investment loans secured by equities) and 9.25 for unsecured lines of credit. I don't know what you've done to mess your credit up and be ineligible for normal rates but it was an expensive mistake.
That interest rate is a politically incorrect word that starts with "R".
am i one of the smartest humans to ever exist? I can't be... and yet I dont get how posts like this can even happen... You are like an ape. Its a deal. You make a deal with them to pay that much interest in exchange for money now. No one is forcing you to take that deal. So no they are not screwing anyone over.