https://padlet.com/trewinsnider/xwgumv764fmtcwi9 Exploring the pros and cons en-us 2022-10-28 02:40:50 UTC 2022-11-01 01:48:42 UTC hello@padlet.com trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360006745
This website is a Canadian lender's information page, describing the benefits of payday loans. It compares this type of loan to other forms of credit in that it explains the advantage of access to cash being quicker, with fewer requirements and less scrutiny. It further divulges into the lack of requirement to show credit history as means to determine eligibility to take out a pay day loan, where the consumer can opt to demonstrate income as means of establishing ability to pay it back in time.

What it significant about this source is that the purpose is to market services to potential customers by demonstrating a competitive advantage over other types of borrowers. The fact that the criteria is less comprehensive makes this particularly attractive to individuals who have had a history of poor credit. Therefore, virtually anybody who has steady employment may be eligible, rendering this a strong tactic to gain new business for a lender.




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The Government of Canada website outlines an extensive list of negative repercussions of payday loans, particularly when the borrower does not have adequate funds at the time of the loan maturing. Though it describes the baseline cost of $17 per $100 borrowed, the severe penalties, which are on top of this fee, are outlined if not paid back in time including additional fees and interest, lawsuit, seizure of property, and garnishing wages.

It is important to visit a variety of sources including government websites, in order to understand the full picture of short-term borrowing. In the mind of a consumer, it may be tempting to make impulsive decisions by visiting a lender's page, which is designed to promote the benefits of payday loans, without seeking an objective source of information that gives figures and draws direct comparisons to other types of borrowing.


]]> 2022-10-28 02:50:16 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360010880 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360012819 This site delves into the numerous alternatives to payday loans. It introduces the argument that while 99% of Canadians have an account with a bank or financial institution, only 4% have ever taken out a payday loan. That being said, it further points to banking services such as lines of credit, credit card cash advances, and overdraft protection and provides illustrations comparing the cost of these loans to those offered at payday loan stores, to which the difference is monumental

This source is important to consider, for it gives the perspective of the competitor, or the alternative to a payday lender. Previously visiting a payday lender's website, shown touting the benefits of its relative ease of access, as well as looking at an unbiased government site, you must also take into account the perspective of a bank or a representative of a bank, with respects to the idea of payday loans. Since this source alludes to the mutual relationship that is formed between a bank and its client, it points out the stark contrast between a bank's desire to work with the client to pay back its offered loans in a timely manner, and the relatively predatory nature of its payday competitor. While a payday store may not particularly care about the ability of a customer to repay in time to make as much money as possible in a single transaction, it is in a bank's best interest to loan out money responsibly, with the long-term goal in mind to leave people in good enough financial shape to be able to take out new debt in the future once the current amount is paid off. ]]> 2022-10-28 02:51:56 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360012819 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360015449 You will learn about payday loans: the so-termed quick and easy way to gain access to cash. The benefits and negative implications will be explored through a variety of websites, informative videos, and images. As you may know, the monetary system is dependent on there being a debt load held by the population, though when most people think debt, we tend to associate it with longer-term loans, lines of credit, and mortgages. Though we must not neglect short-term borrowing as having a significant share of our debt load, for we should look at it in both the perspective of a consumer and the larger economy as a whole.  ]]> 2022-10-28 02:54:14 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360015449 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360042985 This source is a news article that demonstrates how the conditions of the greater economic system can affect individual decisions. Though, the previous source notes that a very small percentage of Canadians have sought payday loans as means to cover expenses in the short-term, this article communicates how the recent pandemic situation in Canada contributed to reduced income for workers in some sectors. Combined with an increased cost of living, more Canadians are experiencing difficulty meeting obligations and paying bills, making payday loans a much more used option than what was observed prior. 

This exemplifies the cyclical nature of the monetary system. When the economic conditions change, personal borrowing patterns change to that of a more risky, more impulsive type and away from the traditional means involving banks. When more debt is created from these payday sources and less from financial institutions, less new cash is created and supplied back into the economic system, resulting is slowed productivity and industry, which explains the looming recession in Canada which is expected to occur in the near future.]]> 2022-10-28 03:18:57 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360042985 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360073820 This video shows the regulatory side of the payday loan business, which, falling under provincial legislation, is subject to maximum fees and interest rates. The second largest payday loan chain in Ontario was found to be charging above the maximum amount prescribed by law and had its license revoked as a result.

Though these stores are predatory in nature, and taking out payday loans have several hidden costs associated which greatly surpasses bank loans and credit, it is paramount that the industry is heavily regulated. In doing so, it somewhat keeps their business practices in check and outlines strict penalties for those who do not abide. Though many people would agree that in many cases government intervention and limitations on industry can be harmful to our economy, this is a prime example of how there is certainly a time and place for it, in that it is only fair that those who are desperate are not overtly taken advantage of. Additionally the consumer can be more informed of the terms of taking out these loans, when it is set out in law, rather than in fine print at the sole discretion of the lender.]]> 2022-10-28 03:44:27 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2360073820 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2361466496 In this video an insolvency trustee is interviewed by reporters at BNN Bloomberg. Key findings are discussed of a major survey, including the fact that for every four in ten Canadians who filed for insolvency, payday loans were a factor that led to the decision. 


It is notable that the expert witness acknowledges that in the overwhelming majority of cases of insolvency, the payday loan is not the first loan somebody takes out, but actually the last. It reveals the harsh reality that when consumers are already burdened with traditional debt loads and credit to meet regular and ongoing expenses, many are so desperate that they are willing to take out new, more expensive debt in order to pay off existing debt while awaiting their next paycheque.]]> 2022-10-29 12:46:46 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2361466496 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2361480922 CBC Marketplace investigators go undercover to several Easy Financial franchises to inquire about taking out a $5000 instalment loan. Although these payday lenders generally deal in the hundreds of dollars over short periods as little as two weeks, many of these businesses do offer longer-term loans in the thousands of dollars. Among the issues the investigation shed light upon include monumental interest rates of 49% as an annual percentage rate, marketed by the company. However, when expressed as an effective annual rate it approaches the 60% threshold set in the criminal code. Another technique these lenders use is the hidden cost of insurance. These lenders often hide the fact that the consumer can opt out of this and therefore avoid what can add up to thousands of dollars on large loans over a long-term.

The investigation reinforces how these lenders prey on vulnerable people who cannot qualify for cash advances, lines of credit, or any loan issued by a bank. By hiding important information, and avoidable costs, they benefit from the sense of fear possessed by the consumer. Most individuals are already in a difficult position, thus the lenders utilize someone's fear of losing a job to ultimately receive an additional hundreds, if not thousands of dollars in insurance fees. Lastly, these lenders often offer rollover loans to those in the midst of paying off their original instalment loan, to which they essentially earn interest on interest and prolongs the period of the loan to generate additional revenue. ]]> 2022-10-29 13:14:08 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2361480922 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2363852386 The illustration above is rather misleading to the consumer for a couple major reasons. Firstly, the fine print expresses limitations to what otherwise appears to be a tempting offer. It only applies to the first transaction between a new customer and the lender. This is potentially problematic, because like in most other "free" trials, the likelihood of someone returning with future business dramatically increases, which leads to dependency on taking out payday loans. Any subsequent loans will involve heavy fees, with the standard at about 15-17%. The advertisement also does not state the implied assumption that interest will accrue if a payment becomes overdue. Though this should be common knowledge, there are unfortunately individuals who neglect to realize this and ultimately owe much more than the principal.]]> 2022-10-31 19:08:50 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2363852386 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2363883945 The table above directly compares the fees associated with payday loans and the fee and interest charge of a cash advance on a credit card. The comparison utilizes a common time frame of two weeks as the duration of a loan with principal of $300. The message is rather clear: For a consumer with a relatively good credit rating, taking out a cash advance in a time of need through a credit card is preferable to taking out a payday loan. Unfortunately, payday lenders market to individuals with poor credit and have effectively monopolized lending lower income demographic since banks are reluctant to lend to those with little credit or poor history. This enables the payday lenders to charge higher rates, with the limits prescribed by law being the sole factor that mitigates it.]]> 2022-10-31 19:38:15 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2363883945 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2363938804 This is an advertisement for a lender and depicts a testimonial from one of their clients. The gentleman recalls a list of positive experiences in dealing with the company. Among these include an easy application process done online and through email correspondence, employment information is the only needed documents to submit with no need to undergo a credit check, and quick access to money within an hour. 

The above video illustrates the power that convenience bears on a consumer. The individual shown fails to mention any important information and figures related to the loan he took out, nor is there any comparison drawn to a loan of a similar term at an actual financial institution. It is therefore demonstrative that many people are unwilling to shop around at banks for a fairer loan with more reasonable terms, even if it is challenging to qualify, nor develop a plan at a young age to build credit to be able to qualify at an accredited institution. This reveals how imperative it is to establish a good credit rating to be able to qualify for a bank loan in an emergency, so as not to need to resort to simple convenience for a much higher rate because there is no other alternative.

]]> 2022-10-31 20:41:33 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2363938804 trewinsnider https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2364188867 2022-11-01 01:48:31 UTC https://padlet.com/trewinsnider/xwgumv764fmtcwi9/wish/2364188867