Guide to Responsible Borrowing
Before obtaining a payday loan, you should consider whether a payday loan is a sensible choice that meets your particular financial needs and situation.
Why do people use payday loans?
When faced with an emergency shortage of funds due to an unexpected bill or repair, a payday loan can be a good solution. For example, it can be less expensive to use a payday loan to pay a late telephone or cable bill to avoid a reconnection charge, or to cover a cheque you have written to avoid an n.s.f. charge from your bank.
Proper use of payday loans
Payday loans are meant for occasional and unusual use only. Payday loans are not meant to be used continuously, or as long-term loans. If you find yourself using payday loans on a frequent basis, you should consider using other sources of financing, or else consulting a non-profit credit counsellor.
Click here to obtain information on credit counselling services.
Understand the terms of your loan
You should read your loan agreement in full and be sure you understand all the costs and terms of the loan. If you have any questions, ask your loan provider. Ensure you receive a copy of each document you have signed. CPLA members must disclose all costs and fees to you, and provide you with a copy of your documents.
You should know when your payday loan is due, and make sure you have enough funds in your account on the due date so you do not incur any n.s.f. fees. If your loan goes into default, you should contact your loan provider to work out a repayment arrangement. CPLA members are committed to collecting your past due loans in a professional, fair and lawful manner.
Other options
You should evaluate your financial situation to determine if a payday loan is a good choice for you. If you feel you are using a payday loan too often, consider other borrowing options such as asking a friend, employer, or family member for a small loan. You might also consider obtaining an overdraft, or a line of credit, or consolidating your debt at your bank.
Help is available
If you find your monthly bills are often exceeding your monthly income, if credit and collection agencies are calling constantly, or if debt stress is making it difficult to cope with everyday life, these are all signs that debt has become a problem. It is always better to recognize a problem and try to deal with it than to let it build into a larger problem. A credit-counselling agency can help you in this situation. Speak to a teller or look in the lobby of your CPLA member loan provider for information on a not-for-profit Credit Counselling Agency near you.