Survey finds pandemic forces more families to resort to high cost loans

A new report from ACORN Canada has found the pandemic forced a lot of families to take a high-cost loan specifically because of the pandemic.

ACORN reported that 440 people took their survey, and 113 respondents reported they had to resort to pay day lenders and pay high interest rates to access the money.

The group representing lower income Canadians said several sectors of employment continue to be adversely impacted by the pandemic, but government support programs have either ended or have been replaced with more restrictive support programs.

ACORN wants the federal government to mandate banks to provide an affordable loan for low-income and moderate-income people. The loans would be back-stopped by the government of Canada to help Canadians avoid predatory lenders during a personal financial crisis.

The ACORN study defined high-cost loans as payday loans, installment loans, title loans etc. that fall outside the traditional banking institutions. Typically, these loans have an annual interest rate of more than 30 percent.