'Worrying:' Payday loan use in Nova Scotia up nearly 50 per cent over five years
Provincial government data shows Nova Scotians borrowed $94 million from payday lenders last year, up from $63.8 million in 2011.
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The amount of money Nova Scotians are borrowing from payday lenders has jumped nearly 50 per cent in the last five years – a statistic one credit counsellor finds worrying.
Data posted on the Nova Scotia government’s website shows the value of loans granted by payday lenders has risen from about $62.8 million in 2011 to $94 million in 2016 – an increase of 49.8 per cent – far outpacing inflation.
Over the same time period, the number of loans granted by payday lenders also rose significantly, from 148,348 to 213,165 – 43.7 per cent.
It’s a trend Linda Wilke hopes won’t continue.
“I find that it exists at all worrying, never mind at these kinds of levels,” Wilke, a counsellor with Credit Counselling Services of Atlantic Canada, said in an interview.
Payday loans are short-term, high-cost loans. In Nova Scotia, payday lenders are allowed to charge $22 in interest on $100. The money is due whenever your next paycheque comes. If that’s biweekly, the interest rate works out to about 600 per cent, Wilke said.
Wilke doesn’t believe there are many more payday lenders in the province than there were five years ago. The problem, she said, is many people lack financial literacy, and the loans are easy to get – and even easier to get caught up in.
Recently, Wilke said she counselled someone who’d been borrowing for six months straight.
The province’s data is incomplete when it comes to the number of people who’ve been repeatedly getting loans – that is, paying them off and borrowing again within 24 hours. But in 2016 alone, more than 5,000 Nova Scotians borrowed repeatedly eight or more times.
Wilke’s advice: “Don’t do it.” And if you do, “Don’t do it more than once.”
“If you find you’re at one of those, you need to talk so somebody,” she said, whether it’s a counsellor like her, or a family member.
“You can’t just keep doing it. You’re throwing money away.”