High-priced debt accounts are escalating at an alarming rate in Canada. As individuals run into credit problems they're rely on high debt institutions and borrow funds at high finance rates. Most High finance company's charges 28 - 32% interest. Generally most people dont understand that these types of loans take a considerable amount of time to pay-off and lets not forget the of finance charges that you do pay.
The usual loan with these establishments will see you pay almost what you borrowed in interest. For example; you borrow $7,000 from a high finance corporation at 28% interest the total amount repaid when the loan is done is aprox $13,077.00. This means you are repaying $6,077 in finance charges. This means are repaying just short of double what you borrowed. This really doesn't make much sense.
Putting that aside the high finance establishments are not the only ones robbing you blind. Almost all the big box store charge outragous interest rates on their credit cards. They will often suck you into getting a line of credit from their corporation by handing out all sorts of incentives and price reductions on products but essentially they're still making a killing on your account. The money they bring in from your line of credit definately off-sets any discount they give you at the store.
One of the reasons many Canadian's look for debt consolidation in Canada is because they simply can't maintain the finance rates charged by these organizations and the monthly payments barely pay the finance charges. Essentially, your debt won't actually get paid off and all you're doing is padding the pockets of these establishments. If you want a simple suggestion for anyone borrowing from high finance companies is read the fine print. Know what you're getting into and look at the interest rates.
Greg Martin
Debt Manager
Phoenix Credit and Debt Counsellors
Debt Consolidation Canada
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