Karine and Mathieu have taken out several loans and accumulated debts on numerous credit cards. Recently, an unexpected drop in Mathieu's salary has had an impact on their fragile budget. They could no longer make their payments. A collection agency contacted them. The couple are anxious to find a solution.
While surfing the Internet, Karine and Mathieu think they've found it. An advertisement offered them the chance to get money in a matter of minutes. Suddenly, a chat window opens, and the couple is offered to accompany them through the various stages of their application. A few moments later, Karine and Mathieu obtain a new loan of... $750! This sum will give them some breathing space while they look for another solution.
Did they get a good deal? Unfortunately not. The loan they've just taken out has to be repaid in just a few months - since they can't afford to pay the bills, how can they? The interest rate charged is high - usually around 28%. They'll have to pay brokerage fees - for the amount borrowed, these range from $200 to $300... In the event of delays, fees of up to $50 a month will be added. And their financial institution may charge them for insufficient funds.
As you can see, the solution found by Karine and Mathieu turned out to be very costly. Yet the couple could have avoided going further into debt by reorganizing their budget, negotiating with their creditors or applying for debt consolidation.
Do you find yourself in a situation similar to that of Karine and Mathieu? To find out which solution best meets your needs, consult the consumer association nearest you; if you live in downtown Montreal, it isOption consommateurs.
To find out more about the costs associated with parallel credit, watch the video produced byOption consommateurs with financial support from the Office de la protection du consommateur.
