Personal Finance

My Experience with Easy Financial

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[OP]
Newbie
May 15, 2016
11 posts
19 upvotes

My Experience with Easy Financial

(This is a repost from a post that I made on /r/personalfinancecanada. I am making this post because I would like to spread some information about this company. The goal is to talk people out of taking loans with them and, if they do, to talk them into paying them off as fast as possible. For those not interested in a long wall of text but want to watch some video on this company, please check out these:

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.
Last edited by titaniumtux on Aug 29th, 2018 3:11 pm, edited 1 time in total.
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77 replies
Deal Addict
May 15, 2013
1771 posts
478 upvotes
Montreal
RaptorMan33 wrote:
1) DO NOT TAKE OUT A LOAN WITH THIS COMPANY UNLESS YOU ARE DESPERATE
But 99% of their customer are desperate .. that's why you go there and not a normal Bank.
[OP]
Newbie
May 15, 2016
11 posts
19 upvotes
iamthebest wrote: But 99% of their customer are desperate .. that's why you go there and not a normal Bank.
I would agree that some easy financial customers are desperate. However, I would argue that a fair number of their customers get loans for stupid reasons (i.e. for ***** that they do not need / should save up for such as Christmas presents).
Deal Addict
Apr 4, 2013
1274 posts
407 upvotes
Some people are desperate, but some also have few options. You can't go to the bank and get a loan for $2000 - the bank won't even fill out the application form as it is simply not profitable for them. The most that the bank would do is get you to fill out a credit card application for an amount that small.

I worked at a different but similar company many years ago. Interest rates are high - very high and it makes it very difficult to get out from under these loans. But, there are ways to turn these loans to your advantage:

1. As the OP stated, never get more money than you need. It goes without saying, but borrowing more than you need at 46% is a fool's game.
2. Always make your first payment on the day you get your loan. Why? Because you are paying down the principal right away and saving on your interest rate. If you can't make a payment then, make it in 2 weeks. If they offer to have your first payment in 45 days - tell them no. Your loan is simply accumulating lots of interest in those 45 days.
3. Most of the time these loans are open. This means you can pay extra or pay them off when you want. Always pay extra. Every loan I closed when I worked in this industry I would write on a note pad how much money the client would save if they just paid $20, $30 or $40 extra on their loan. I always asked them to place this on their fridge to remind them to pay the extra. Wanna know how many people did? Two.
4. Pay early. If your payment is due next week and you get paid now, get in there and make the payment early. At 46%, saving early helps.
5. Skip the insurances. The cost of the insurance is simply added to the loan and then you pay 46% on top. Ouch.
6. Never, ever, ever, ever defer a payment on these loans. When you defer a payment, it means your loan is accumulating 60 days of interest at 46%.
7. Never re-write these loans. Most of your interest is paid at the beginning of your loan. As you pay down your loan balance, your interest charges decrease. Re-writing the loan just means that you start over from scratch paying the most interest on the new loan.
8. Finally, did I mention pay extra?
Deal Expert
User avatar
Jan 27, 2004
45439 posts
8452 upvotes
T.O. Lotto Captain
Wow are you really a friggin lawyer? Thats amazing man. Takes hard work to get there.
Its interesting to see even the highly educated fall to into these debt traps.

Yes "its your own damn fault" or "you should know better". But i honestly think most people have an inkling of how shitty these types of loans are, but we're setup to fall for them. There is a reason people fall for them... Times are rough and people need money... Easy credit is everywhere.
Deal Addict
Sep 7, 2004
1595 posts
593 upvotes
Toronto
UrbanPoet wrote: Wow are you really a friggin lawyer? Thats amazing man. Takes hard work to get there.
Its interesting to see even the highly educated fall to into these debt traps.
I'm generalizing a bit here and anyone on RFD likely won't fall into this category but I have known quite a number of professionals that are incapable of managing or even understanding their money. I'm talking doctors, lawyers, engineers...

With the uber high income earners they are often time starved and don't have the bandwidth to worry much about where their money is going. They just know that their next paycheck will be big so they spend without discretion.

Often time their income is enough to stop them from needing to borrow at tier 2 tier 3 lenders but it's not uncommon for these professionals to be working just to keep their heads above water.

I'd agree with a lot of the posters above. It's super likely that anyone considering a lender like Easy Financial is at the end of their rope and don't have a lot of options. I'm just surprised that these predatory lenders exploit the most needy with all these ridiculous fee's and nearly criminal interest rates ensuring that the clients will never pull themselves out of the borrowing cycle.
Member
Jan 10, 2016
328 posts
50 upvotes
Markham, ON
Cheaper than loan sharks.
Those guys charge over 500% annually. You can easily find those loan sharks lurking in the casino. But they are very careful of whom they lend to.

Easy Financial only charge 50%, which is within the maximum limit of 60% per year.

At least OP learned his lesson, I know a lot of people can't learn anything. They repeat their mistakes over and over again in a slight different situation.
[OP]
Newbie
May 15, 2016
11 posts
19 upvotes
gqbluez wrote: I'm generalizing a bit here and anyone on RFD likely won't fall into this category but I have known quite a number of professionals that are incapable of managing or even understanding their money. I'm talking doctors, lawyers, engineers...

With the uber high income earners they are often time starved and don't have the bandwidth to worry much about where their money is going. They just know that their next paycheck will be big so they spend without discretion.

Often time their income is enough to stop them from needing to borrow at tier 2 tier 3 lenders but it's not uncommon for these professionals to be working just to keep their heads above water.

I'd agree with a lot of the posters above. It's super likely that anyone considering a lender like Easy Financial is at the end of their rope and don't have a lot of options. I'm just surprised that these predatory lenders exploit the most needy with all these ridiculous fee's and nearly criminal interest rates ensuring that the clients will never pull themselves out of the borrowing cycle.
With regards to my situation, I *probably* could have qualified for a loan from the bank if I really needed it, I was making OKAY money. However, I was really stressed out at the time and really needed the money now. As I've admitted, this was not my finest hours.

With regards to why I was 'at the end of my rope' (and why a lot of professors are at the end of their rope early on in their careers), is that the student loan payments that come out of your account when you are starting out take up a significant part of your income. When I graduated law school, I owed about $80,000.00 and was putting aside about $1500.00 per month in loan payments (note: that was more than the minimum payments).

Now, when you have been in school for 7 years and have not earned that much in terms of an income during that time AND have large student loan paymetns to make, it will take you a long time to build up a safety net. My situation was bad three years ago, but for what it's worth, I had plenty of friends who were 10x worse.

In regards to professionals in general, a lot of lawyers are really, really awful with their money. Not just lawyers, but engineers, doctors, ect. I actually know of a partner at one of Canada's largest law firms who was forced to declare personal bankruptcy a couple of years ago due to being a spendaholic despite the fact that she was earning well over $400,000.00 per year.

One of the problems that lawyers run into is that they spend like idiots while in law school and have a lot of student loan money available. When these students get out of law school, most of them get jobs that pay fairly decent (I'd argue that most law graduates start between 45 and 60). They are able to make the minimums on their loans and still live comfortably. They get used to this lifestyle, since they always make their loan payments they have decent credit so the banks keep giving them more and more money and BOOM . . . they are financially *****ed.

The point is, just because someone is really bright and understands complex areas of the law does not mean that they are smart in other areas of their life. A lot of lawyers do not understand the time value of money and the only reason why they are doing okay financially is because they are earning a lot of money. However, since they spend like drunken sailors, they need to work until their old age despite the fact that they have earned a decent living. I am obviously generalizing a bit, but it is something worth considering.
[OP]
Newbie
May 15, 2016
11 posts
19 upvotes
cbr663 wrote: Most of the time these loans are open. This means you can pay extra or pay them off when you want. Always pay extra. Every loan I closed when I worked in this industry I would write on a note pad how much money the client would save if they just paid $20, $30 or $40 extra on their loan. I always asked them to place this on their fridge to remind them to pay the extra. Wanna know how many people did? Two.
That is really nice of you. I'm surprised that you were even allowed to do that. I would think that if most of these companies found out that you were offering common sense tips like this they'd fire you.
Deal Addict
Apr 4, 2013
1274 posts
407 upvotes
RaptorMan33 wrote: That is really nice of you. I'm surprised that you were even allowed to do that. I would think that if most of these companies found out that you were offering common sense tips like this they'd fire you.
Thanks. I was often told that I was too transparent and open with the clients. I remember an older lady who came in and sat across from me with a large cheque. She had sold something and wanted my advice on whether she should pay off her loan with us at 29.99% or pay off her Visa. Of course I advised her to pay out her loan at 29.99%. My manager got frustrated when he saw the payout on his reports, and you can bet that I didn't offer that I suggested that she do it.
[OP]
Newbie
May 15, 2016
11 posts
19 upvotes
cbr663 wrote: Thanks. I was often told that I was too transparent and open with the clients. I remember an older lady who came in and sat across from me with a large cheque. She had sold something and wanted my advice on whether she should pay off her loan with us at 29.99% or pay off her Visa. Of course I advised her to pay out her loan at 29.99%. My manager got frustrated when he saw the payout on his reports, and you can bet that I didn't offer that I suggested that she do it.
Wow, so your managers actually kept track of who paid off their loans early and gave you guys ***** for allowing it to happen?
Deal Addict
Apr 4, 2013
1274 posts
407 upvotes
RaptorMan33 wrote: Wow, so your managers actually kept track of who paid off their loans early and gave you guys ***** for allowing it to happen?
Of course managers do. These are sales jobs - you are selling money - and a huge part of performance is maintaining volume. You had to keep the total dollar volume on the books up. It was challenging as you were primarily writing smaller loans. You wanted loans in the $5000 - $7500 range. Any larger and there was risk of charge off or payout and any smaller and you simply had to work harder to meet your volume targets. It was the same amount of work to do a $7500 loan as it was to do a $1000 loan.

The thing that frustrated me so much is that these places do not need to have the reputation that they have earned. It can be a win-win for everyone if the branches were more open on how things worked and actually offered more advice and guidance.

I saw that there were generally 3 types of people who used these places: people like yourself who are just temporarily over-extended and run into back luck. These places can actually be the help that they need. Then you have the under-employed people who are struggling to get by and are limited by their circumstances. These were the customers I felt most empathy for their personal situations were not going to change while they were under-employed. The last group was the "I don't care" and I just want the money folks. These are the folks that keep borrowing more and more until they can't borrow any more - forever living beyond their means and don't care. These are the folks that blame everyone else for their problems and accept no personal responsibility whatsoever.
Sr. Member
Nov 6, 2015
955 posts
557 upvotes
Guelph, ON
cbr663 wrote: Some people are desperate, but some also have few options. You can't go to the bank and get a loan for $2000 - the bank won't even fill out the application form as it is simply not profitable for them. The most that the bank would do is get you to fill out a credit card application for an amount that small.
Banks have a different product for these small amounts - Line Of Credit.

Thanks for your interesting insider reports on how these institutions operate.
Sr. Member
Feb 17, 2015
982 posts
360 upvotes
Windsor, ON
Easy financial was a perfect way to get unsecured credit after a bankruptcy or consumer proposal/credit counseling, it does report to Equifax and TU every month, they will give credit to pretty much anyone at a fraction of the price of a payday loan, each time you apply for a loan/pay it off reapply it hits BOTH of your credit reports making it pretty hard to build credit history without allowing them to make that 50-60% interest off you for at least 6 months - 1 year.... I did take out a few back in the day after a bankruptcy and they did help build my credit history and score, all the loans were in the 1K-2.5K range, in which a year after paying these loans I was granted an unsecured credit card with a less than 2 year old bankruptcy sitting on both my credit reports, could I have used a secured credit card to accomplish the same thing, likely yes, did I have the 300-1000 for the secured card at the time ....no, these loans should only be used for people with bad credit scores that won't qualify for traditional loans or even B lenders like affirm/capital one and if you really need these loans as mentioned above, if you don't need it and your just trying to build credit there should be no need for higher balances on them either (I always used to pay mine off within 4-6 months to minimize the interest)
Member
Jul 22, 2015
284 posts
112 upvotes
Toronto, ON
Although they aren't the best company, they still provide unsecured loans to people with damaged credit. In my case, I got a loan with them, settled a collection agency and applied for a Capital one credit card and did a balance transfer. Since I was able to settle the unpaid collection, I received an unsecured credit card with CIBC. I'd recommend everyone to first pursue the Capital One guaranteed credit card and lie about your income so you can get the $6k limit card.
Deal Addict
May 15, 2013
1771 posts
478 upvotes
Montreal
UrbanPoet wrote: Op. Did you need it on the spot? I'm thinking you could have gotten something like a 11.99% credit card from rbc or bmo. Annual fee is only 20-30
But CC are not given on the spot. You need to wait for them around a week to arrive by mail and then activate it.
Deal Addict
Jan 28, 2008
1387 posts
55 upvotes
So I do some financial planning/ budget work for new immigrants in our community. The amount of people who go into these things despite getting access to money from banks.

These types of places advertise in non English papers - people kinda assume they can't get money any other way with out even trying.

Most of the loans I have seen have been smaller (average probably 500), but there is no need for it. The worst part of it our community will give you small interest free loans if you need help but people are too ashamed/scared to take it. It's really just the people who have been here a while or Canadian born people that do it.

Even if you don't need it - go talk to a bank and see what your requirements are to get a loan even a small 1000-2000 for emergancies. Just to have it sitting there even if you never use it.
[OP]
Newbie
May 15, 2016
11 posts
19 upvotes
iamthebest wrote: But CC are not given on the spot. You need to wait for them around a week to arrive by mail and then activate it.
But on this point (and for the benefit of anyone who might be in a bind and reading this thread and thinking about taking a loan out with easy financial), they *do* take mastercard. So, you could always take out a loan with them, apply for a Capital One Mastercard and then as soon as you card comes in, use it to pay off your EF balance in full.

Another option may be to do a balance transfer with an MBNA card. I know that you can transfer loans onto the card; however, I am not 100% certain how that works.

You'll be paying a bad interest rate with either of these cards. However, it's still better than the 45%+ you'll be paying with Easy Financial.

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