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As Canadians rack up high levels of debt that are causing concern even outside the country’s borders, new research from The Financial Consumer Agency of Canada has found nearly 90 per cent of Canadians who take on costly high-interest payday loans are doing so to cover necessary expenses or avoid late charges on bills.

The use of short-term payday loans — where charges in some provinces can be equivalent to an annual percentage rate of 500 per cent — has doubled recently to include four per cent of Canadian households, according to the consumer agency.

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While some are using the loans to cover unexpected expenses that crop up, the FCAC is concerned about the overall trend.

“High household indebtedness and low levels of consumer savings, particularly the absence of a household emergency fund, make a payday loan a solution for many consumers despite their very high cost,” said Jane Rooney , financial literacy leader at the consumer agency.