My Experience with Easy Financial
CBC Marketplace Episode: https://www.youtube.com/watch?v=B39eDlBAUF8
Calculation of their TRUE APR (hint: it's over 80%): https://www.youtube.com/watch?v=06ofK24gQnc )
I would like to share my experience with one of the worst companies in Canada: Easy Financial. This subreddit is filled with people who are generally pretty good with money and probably would never need to take out a super high-interest loan from a company such as this. However, I also know that this subreddit is filled with some people who are in a rut with money and I am writing this post to hopefully get through to them. The tl;dr version of this post is:
1) DO NOT TAKE OUT A LOAN WITH THIS COMPANY UNLESS YOU ARE DESPERATE; and 2) If you HAVE to take out a loan with this company, turn down the insurance; and 3) If you HAVE to take out a loan with this company, pay it off ASAP
My financial situation is pretty good today. However, that was not the case three years ago. I was a fairly recent law school graduate articling at a smallish law firm where I was not making a ton of money. To make matters worse, I also had a lot of expenses in the form of student loan payments so my budget was truly razor thin. I ended up having some car problems and needed to get them fixed. The problem? I had no savings and was close to maxed out on my credit card.
I took my car into the shop and needed $2000.00 to bring my car up to speed and I needed it fast (I used my car for work). My parents are great, but they do not have money so I couldn’t ask them.
While trying to figure out what to do, I came across a company called Easy Financial. They offered loans to people with bad credit. I thought “Great! My credit isn’t even that bad so I’ll be guaranteed money with them”. I ended up applying for a loan with them and, not only was I accepted that same day, but I also received my money 60 minutes later!
I got $2000.00, got my car fixed and things were looking good. Unfortunately, I did not feel so good two weeks later when I looked over the terms of my loan without the lens of “OMG I NEED MONEY NOW” and realized what I had done. Here are a couple of the things that I learned, and a few things that anyone considering taking out a loan with this company should keep in mind:
Firstly, the interest rate is absurd. They are currently advertising that they are offering loans at a ‘lower’ rate of 29.99%. However, their ‘standard’ rate is a couple of percentage points shy of 50%. In other words, if you carry out your loan to term, for every $1000.00 you owe, you’re look at paying close to $500.00 per year in interest.
Secondly, if you sign up for a loan with them, they are going to try and ‘trick’ you to sign up for loan insurance. They won’t LIE to you per se. However, they are going to bring up the insurance to you in a way which suggests that the insurance is not optional. BE STERN WITH THEM AND SAY THAT YOU DO NOT WANT THE INSURANCE.
Why don’t you want the insurance?
Because it is very expensive. The insurance is about $40 bi-weekly or approx $2080 a year! In other words, between interest and insurance, you are going to be paying MORE than the cost of a $2000.00 loan per year if you follow it to term!
Thirdly, they are going to try to push a pre paid MasterCard on you. This MasterCard, of course, is a disgusting scam. They’ll charge you an activation fee (forget how much it was) and then charge an additional $1.00 PER TRANSACTION.
Finally, they know that most of their customers are in a rough shape financially and they will try to take advantage of that. Once you qualify for a new loan, they will call you quite regularly to remind you of that. And, they won’t take ‘no’ for an answer. If you say ‘no’ at first, they’ll respond with things such as:
“Christmas is coming up, are you sure that you don’t want money for presents?”
Of course, there is more wrong with this company than what I just listed, but those are the big four things to keep in mind.
The good news as it relates to my situation is that this stupid loan really helped kick my ass into shape when it comes to my financials. Once I realized how stupid I was for taking out that loan, I did all I could over the next 6 months to get it paid off. After that, I was used to living on less so I started to throw more money towards my student loans and begin investing a little bit. When it comes to my financials, I still have a lot of room to grow. However, I currently have about $5000.00 in an emergency fund and am throwing about $2500.00 per month against my student loans.
Now, if you are thinking about taking a loan out with these people, I do ask that you reconsider. I ask that you consider just about any other option available to you. Consider applying for another credit card, asking a friend, asking a family member, ect. However, as was the case in my situation, I know that sometimes money just sucks and you need help. If that is the case, please keep these things in mind:
1) Please know that you are getting ripped off by them and the longer you keep this loan open, the more ripped off you will be getting. PAY IT OFF AS FAST AS YOU CAN. \
2) Say no to the insurance.
3) Only take out the ABSOLUTE MINIMUM THAT YOU NEED.
4) Keep in mind that they do accept Mastercard. As such, as soon as you feel that your credit is good enough to qualify for a Mastercard that would pay off the loan, do so and use the Mastercard to pay off the loan (Capital One is generally pretty good at giving out cards to those with substandard credit so consider them).
5) Once you pay off your loan, try to do all that you can to ensure that you never end up in this situation again! Build up an emergency fund and destroy all of your other debt. Easier said than done, I know. However, please do all you can to ensure that companies like this are not taking 1000-2000 form you per year just because of your money problems. Get a part time job delivering pizzas if you have to, just do everything to fix your mess because, if you don’t, it is going to be a long and shitty life for you.
6) Don’t let anyone make you feel like bad for being bad with money. It happens. Just remember point 5: fix it.
If you are reading this and struggling with money, please do not hesitate to send me a PM. I know how bad it can be and if I can help out in any way, I will.
Reason: Filtered words