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Debt Relief Solutions For Payday Loans

Alternative Consumer Lending refers to payday lenders, cheque cashing businesses, pawnbrokers and other lenders who provide small short-term loans to consumers. Sometimes loans of this nature are a necessary convenience to deal with small financial emergencies, but they are available at a significant cost. For further information, refer to these websites:
Consumer Protection in the Payday Lending Sector – Ontario,
and The Cost of Payday Loans – Canada.


The Consumer Measures Committee is comprised of members from the federal, provincial and territorial governments and is a forum for national cooperation to improve the marketplace for Canadian consumers. Below are excerpts from a Letter to Stakeholders – December 14, 2004 regarding Alternative Consumer Lending:

“The last decade has seen significant growth in small short-term lending in Canada. Loans are used for a variety of reasons, ranging from lifestyle choices, to covering unforeseen emergencies such as car repairs, to simply trying to make ends meet between pay cheques. While many consumers see these loans as a convenience or even a necessity, they come at a high price and, in addition, some consumers experience abusive lending practices.

The circumstances under which alternative consumer credit market loans are advanced can leave consumers unable to repay them within their terms. The result can be a ‘debt spiral’ marked by the revolving use of small short-term credit in successive pay periods, and the compounding of the already high costs of borrowing.

Inability to repay may lead to various supplementary charges and penalties, many of which are clearly excessive, such as the seizure of assets worth substantially more than the loan principal.” So therefore it is very important how you manage your money as it may lead to a position where you end up not being able to pay your debts and may ending up filling a bankruptcy or a proposal. Learn more on Consumer Proposal FAQ.

You can read the full text here: Alternative Consumer Credit Market Consultation.

If you find yourself having to use this type of lender routinely or because of debt crises, you need to assess your financial situation.