Increasing number of Nova Scotians turning to short-term loans: report
Published Tuesday, November 7, 2017 10:16PM AST
The provincial government says more and more Nova Scotians are turning to high interest, short-term loan lenders for fast cash.
According to a government report, Nova Scotians borrowed $94 million from short-term loan lenders over a one-year span. The amount borrowed over five years has increased nearly 50 per cent.
The interest on a $100 loan is $22 dollars, and if you keep rolling over that $100 loan for a year, you'll pay $572 just in interest. But most people are borrowing a lot more than $100.
Shelly Oaks says when she started borrowing money that way, she didn’t know what she was getting herself into.
“I fell into a trap,” says Oaks. “I didn't know how to get out of it and I couldn't get out of it because it kept going around in circles and cycles."
Oaks spent years trying to get the loans paid off.
“I tried to pay my bill back as best as I could and just found it really difficult,” she says. “It kind of really interfered with my financial situation."
It’s a story credit counsellor Linda Wilke has heard all too often.
“Prices are going up, people are getting more and more desperate and you do what you have to do," says Wilke.
Nearly 6,000 Nova Scotians borrowed eight times or more last year. Wilke says it’s best to go with a different plan, if possible, when something like a sudden car repair comes up.
"You're going to take the bus to work, you're going to speak to your mother to see if you can borrow whatever it costs to get the car fixed," she suggests.
The Consumer Finance Association of Canada, which represents short-term lenders, says their members are responsible and work hand-in-hand with credit counselling services, encouraging customers to borrow responsibly.
With files from CTV Atlantic’s Ron Shaw.