Pay Day Loans

By: Beenish Khurshid, Montreal, Quebec

I recently ran into a sponsored article in a well known newspaper discussing strategies for getting out of debts. Their solution (regrettably) was a Pay-Day loan from, from the sponsoring company of course.

There are few things in the world I despise more than Pay-Day loans. For one, the concept - charging people money for borrowing money - is categorically haram in Islam. Pay-Day loans also take advantage of people in desperate situations - making deceptive promises, obliging people to pay more money than they have.

Pay-Day loans are small, short-term, unsecured, high-interest loans. A borrower may be short $300 for the month, borrow $300 from the Pay-Day agency, with the intention of paying the loan back on his next paycheck. Unfortunately, borrowing $300 one month may mean paying the agency back $650 in two months - putting the borrower in an even more precarious situation than when they began.

So what should someone do if they are short one month, or are consistently short one month to the next? Take a step back and assess your situation. How much money is coming in? How much money is going out? What are you spending on? What can be cut-back?

This step can be quite challenging as it will involve cutting back, not only for yourself, but for your wife and children, and can come with a feeling of not being able to provide a good quality of life for your family. This step can really hurt, but remember: even while living on less, a family can find ways to make joy and happiness. Look for things like cutting out brand names, reducing spending on things like clothing, accessories. Consider replacing your car with a less costly to maintain one, and a more fuel efficient one. You may also consider switching to public transit and calling your car insurance to report a reduction in mileage. A longer term move to reduce expenses is to move to a less costly home - rent, heat, electricity and other costs combined.

Another thing to remember is that while holding financial burden independently may feel like one's duty, most wives and spouses are receptive to difficulties a provider may be having, understanding, and providing at least a shoulder of comfort and kind ear to discuss solutions with. Letting your spouse know will help you two face the challenges of financial stress together, supporting each other through thick and thin.

REACH OUT FOR HELP

There are times when adjusting our lifestyle, moving to a smaller house, or working longer hours doesn't cut it, and you need help making ends meet - either to pay off debts, or to make ends meet month to month. While it is hard to do, there is a time where one needs to lean on the community safety net. If your situation is getting dire, reach out to trusted friends or family for support. If not financial, your social network can help you in other ways - free childcare for example. You can also reach out to organizations in your community that are dedicated to helping Muslims in challenging situations. Organizations such as Muslim Family Network Society, National Zakat Foundation, or the Toronto Muslim Food Bank.

Many governments also provide social services such as welfare for people in dire conditions.

RESTRUCTURE YOUR LIFE

Maybe a higher paying job is what you need. Maybe a reduction in expenses. Maybe it is working more hours. Whatever you need to make your situation work, make it happen. No one else will, or can do that for you. Strive, and be intelligent, about earning for your family, getting advice, support and help from people as needed.

TRUST IN ALLAH

While we try our best to provide for ourselves and our families, at the end of the day, it is Allah that provides for us. We work, but we trust in Allah to provide. And if He is restricting our provisions, He is only testing us and testing the Muslim community as to which of us is best in deed. Keep it halal, no matter how hard it gets. Remember the afterlife is better than the world. And remember your Muslim brothers should be, and are there to support you.

Photo By: luca-bravo on Unsplash