Know Your Rights: Borrowing Money
Your Rights When Borrowing Money
Whether you’re buying a house, car, or need a little extra money until payday, almost everyone borrows money at some stage or another.
It’s essential to know your rights about the money you are borrowing and the information you should receive to stop you from being taken advantage of.
Information you should receive
Banks, loan companies and trusts are all federally regulated institutions and therefore are required to provide you with certain information about any credit that you receive.
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When taking out a credit card, you must be provided with information that makes it easy for you to understand the terms of your credit agreement.
This information must be supplied whenever your agreement changes and on each of your monthly statements.
On your statements themselves, you should be provided with information to help you understand your credit commitments, including your outstanding balance, how long it will take you to pay back when making only the minimum payments and details on interest and any other fees.
Lines of credit
When taking out a line of credit, all information must be included within an ‘information box’ at the beginning of your credit agreement or in a second document provided at the time the credit is issued.
You should be provided with the initial interest rate, your annual interest rate and details on your minimum payment terms and any fees that you may be charged.
When applying for a loan, the financial institution must provide you with details including the amount you are borrowing, your interest rate, the term of your loan and the date you will begin to pay interest.
The information provided should also cover any other fees that you could be charged and the annual cost of the loan.
Generally, when taking out a mortgage, you must be provided with information about the amount you are borrowing, the interest you will be charged, the term of the mortgage, and when you will begin to pay interest.
Cash advances and payday loans
Payday loans are a relatively new form of credit, and so each province in Canada still has different regulations.
Most areas restrict how much interest payday lenders can charge, and many also require that the details about your loan and the amount you must repay are written prominently on your agreement.
Because the regulations around payday loans still differ, it’s best to research the laws for your province before applying.
What to do if you have borrowed more than you can pay
Despite these regulations, banks, loan providers and credit institutions still make it quite difficult for people to see how much money they are borrowing and how much interest they will need to repay.
Lack of communication can cause people to fall into a debt that they cannot afford and can spark a cycle of debt that can be hard to escape.
If you think that you could be in a cycle of unaffordable debt, then we are here to help.
Call us today on (877) 879-4770 to be connected with a local Licensed Trustee who will be able to provide you with free and confidential advice about available debt relief services near you.
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