Cardus provided this policy intervention a failing grade: F. it’s the short-term nature of pay day loans that puts the pressure that is heaviest on borrowers.

Cardus provided this policy intervention a failing grade: F. it’s the short-term nature of pay day loans that puts the pressure that is heaviest on borrowers.

Our report card noted that “reduced prices would be the activists’ darling, but studies have shown that in the event that you have to borrow $300 for ten times to get necessities and settle payments, its effect is restricted or negative.” Our testimony to your national government committee’s reviewing the legislation noted that

It is the short-term nature of payday loans that puts the pressure that is heaviest on borrowers. The existing typical term of the payday loan in Ontario is 10 times, and it’s also the necessity to repay both the key and interest at once that does the most problems for customers. They run the risk of terminal dependency on small loans as we note, this “effectively moves the burden of illiquidity from one pay period to the next” (33) and moves the cash-flow challenged consumer into a position where. […]