Online payday lenders in Canada are facing series of difficulties in lending loans. It is so because they are undergoing series of inquiries because of fall in reliability of people in online short term loans. Payday loans
are now subjected to stricter regulations in the nation. People who used to borrow short term loans to meet their emergency cash need said that it is worse to pay charges for late repayment and overdraft fees.
FCA has been cracking down on payday lenders in Canada. They gave them pledge to cap loan rates at 0.8% a day of the amount borrowed. No one is supposed to pay back more than double of the borrowed amount. As per statistics reports 720 applications were rejected down for instant cash loan service. Later on 27% of them became defaulters, 4 % turned to illegal lenders and 2% turned to credit union. Russell Hamblin-Boone claimed the hundreds of thousands of people were out of credit because of decreasing lending options for them.
Denied Payday Loans Issue
Price cap is good but shrinking market options is not at all good as it will increase household debt problems. To overcome such situation it is very necessary that banks should start micro lending to help people handling economic situations. Online short term loan is best lending option till date if regulated with proper rules and regulations.
Research online for reliable lenders and just fill an online application form to apply for instant cash loans. A person can also take help from financial adviser to select genuine lending agency. Checking loan license and policy is borrower’s responsibility whereas providing them financial security is FCA’s duty. A borrower should be Canadian citizen if he wants to borrow money this way. He must be a regular employee since last three months under same employer earning at least $1000 per month in order to ensure repayment to lender.
Russell says that it is right to keep people away from such borrowing options which are hard to pay back but keeping them helpless to arrange money with easiest way is not justice with them. So, it is better to cap payday loan rates. Implementing strict regulations for payday lending will help both lenders as well as borrowers. Borrowers should be clearly counseled at very first step that they have to pay back loan amount at any cost; otherwise they can be legally penalized. Lenders should be taught stated rules so that they cannot leak out borrower’s personal details and don’t dare to cheat people at the name of interest rate.