Rising Consumer Debt Means Busy Payday Loan Stores in Canada

Historical archive, first published 2005 — payday-lending laws and rates have changed since. Preserved for the record.

Contrary to popular belief, Canadians who frequent payday loan shops are well-educated, pocket decent incomes and don’t believe they are being ripped off.

The study, commissioned by the payday-loan industry, indicated users of the service are generally satisfied and opt to go because of the convenience, and the refusal by chartered banks to provide small, short-term unsecured loans.

The survey indicated only five per cent of the Canadian population uses payday lenders. Of those who do, the average income is about $41,500. Of the customers surveyed, 35% had incomes of more than $50,000.

Even though Canadian payday loans, like American payday loans, also have triple digit APRs, 72 percent of payday loan applicants surveyed said they thought the cost of taking out a payday loan was reasonable. Whether a fast cash advance is right for you is a different matter. Think it through and be sure you are prepared for the responsibility.