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Difference between revisions of "Types of Lenders and Creditors"
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Types of Lenders and Creditors (view source)
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=== Interest rates === | === Interest rates === | ||
Surprisingly, there is relatively little direct regulation of the interest rates creditors can charge. The most important provision is in the Canadian [http://canlii.ca/t/7vf2 ''Criminal Code''], in [https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-46/latest/rsc-1985-c-c-46.html#sec347_smooth section 347], which sets an interest rate ceiling for all creditors at 60% per year, except as authorized under payday loan legislation. Up to that limit, creditors can generally set credit rates as they see fit. Most lenders such as banks, trust companies, and credit unions have relatively competitive rates. The interest charges for finance companies are generally higher, as are the interest rates charged by department stores and other merchants who grant credit on their own credit card systems. | Surprisingly, there is relatively little direct regulation of the [[Interest and the Cost of Borrowing Money|interest rates]] creditors can charge. The most important provision is in the Canadian [http://canlii.ca/t/7vf2 ''Criminal Code''], in [https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-46/latest/rsc-1985-c-c-46.html#sec347_smooth section 347], which sets an interest rate ceiling for all creditors at 60% per year, except as authorized under [[Payday Loans|payday loan]] legislation. Up to that limit, creditors can generally set credit rates as they see fit. Most lenders such as banks, trust companies, and credit unions have relatively competitive rates. The interest charges for finance companies are generally higher, as are the interest rates charged by department stores and other merchants who grant credit on their own [[Credit Cards|credit card]] systems. | ||
However, a variety of federal and provincial laws require lenders and retailers to disclose both how much interest they are charging and how those charges are calculated. These laws include the federal [http://canlii.ca/t/7vh8 ''Interest Act''], and Part 5 of the provincial [http://canlii.ca/t/84mr ''Business Practices and Consumer Protection Act'']. | However, a variety of federal and provincial laws require lenders and retailers to disclose both how much interest they are charging and how those charges are calculated. These laws include the federal [http://canlii.ca/t/7vh8 ''Interest Act''], and Part 5 of the provincial [http://canlii.ca/t/84mr ''Business Practices and Consumer Protection Act'']. | ||
