With rising costs of goods and services, it can be pretty challenging for the average Canadian family to continue meeting their financial obligations. Since 2020, there has been a substantial increase in small emergency loans. According to a national survey, 80% of emergency loan borrowers earn around $50,000K. With little over 19% at $80,000.00, and the rest at $120,000.00. 40% of the borrowers take out about 2-3 payday loans a year, and 30% take out at least one loan.
Reason for Borrowing
The main reasons people take out emergency loans are to cover various general expenses. The average amount of these loans can vary, but most Canadians borrow just around $502.00. Most people took out loans to cover necessary costs for repairs (Vehicles, home appliances, etc.). Followed by regular monthly expenses such as rent, household-related bills, mortgages, etc. Some Canadians took out loans to buy presents for what they deemed as special occasions.
Savings Per Household
About 40% of Canadians have six months’ savings to cover their basic expenses. The remaining majority can cover only three months or lower. Experts suggest more financial knowledge may minimize the need for borrowing funds. Also, curbing down on current spending habits may help as well. The top three things Canadians spent most of their money on in 2019 were groceries (Food and beverage), insurance, and home furniture.
Limited Lending Options
Due to the lack of other lending options to help people with minor cash issues, emergency loans offered by payday loan companies have become quite common. Since banks have a much longer vetting process, most people naturally gravitate towards short-term loan providers. Some payday loan lenders in the industry may have also adapted Fintech-style applications to serve the more digitally inclined Canadians. Today an applicant goes through a streamlined, step-by-step process online and receives their short-term loan within minutes of accepting the contract. For example, suppose you want to get a fast payday loan in Langley. In that case, you can visit a lender’s website and complete the entire application process without physically walking into a brick-and-mortar location.
Serving Its Purpose
Emergency loans have been fulfilling a need in the market. If a person needs to borrow money reasonably quickly, payday loan providers can offer such services. For small emergency loan inquiries, visit My Canada Payday. When selecting a payday loan lender, make sure you deal with someone with a long history and publicly verified reviews.