What you should know about payday loans
Many people seek out payday loans because they are unable to obtain traditional financing. Often times, the money is desperately needed for an unexpected emergency expense that needs to be paid quickly. Payday loans are also typically very easy to get, which makes them appealing when you are in need of fast cash. Although payday loans often appear helpful at first, they can really put you in a precarious financial situation if you are not careful. It is important to understand how they work and the risks involved in using them.
Fees and interest rates on payday loans in Saskatchewan
In Saskatchewan, lenders are allowed to charge up to $17.00 for every $100.00 given on a payday loan. That amount must include all types of fees (interest, loan administration, processing, application and brokerage fees). The fee is due and payable on the loan repayment date, which is typically just one pay cycle away. The cost of borrowing can therefore add up quite quickly. The fee charged for a missed payment is set at $25.00. In Saskatchewan, up to $1,500.00 can be borrowed on a payday loan.
To demonstrate the possible fees on a payday loan, assume that you borrow an amount of $1,000 on a payday loan, and that the repayment date is in 14 days. The cost of borrowing will be $17.00 x 10 = $170.00. The total amount that you must repay in 14 days is therefore $1,170.00. To put that in perspective, that works out to an APR interest rate equivalent of 443.21%. Relatively speaking, this type of loan can be quite costly.
