Now there is a cheaper alternative for people in Saskatchewan looking to borrow money until their next payday.
Affinity Credit Union says it has a cheaper interest rate for loans – they can offer short-term loans of $ 200 with an interest of $ 1.38 on that loan, compared to the standard rate of the industry $ 34. The credit union will provide loans up to $ 2,000, but you will need to open an account with Affinity.
High interest payday loans can be a particular challenge for people experiencing poverty, said Kristin Nelson, associate director of community impact for United Way Regina.
“When people access these high interest payday loans, it can really continue this cycle and it keeps people in poverty for longer,” Nelson said.
Under current Saskatchewan law, businesses can charge 17% on a two-week loan, which means if you borrow $ 100, you pay back $ 117.
The convenience of a payday loan is often what makes them so attractive, Nelson said. Payday loans are quick and don’t have a lot of hurdles other than a paycheck stub.
But if you are unable to repay the loan within those two weeks, you will have to pay more.
Affinity will give clients up to four months to repay loans in some cases, according to Fred Khonje, community advisor at Affinity.