Difference between revisions of "Types of Lenders and Creditors"

Note that FMEP does not have the power to change the amount of child or spousal support that someone owes. If a payor wants to change the amount of child or spousal support that they are legally required to pay, the payor must apply to vary the court order or agreement that FMEP is enforcing.  

Millions of dollars are lent for educational purposes under federal and provincial '''student loan programs'''. Although a student in BC who applies for both a Canada and BC student loan uses only one application form, the loans are repaid separately.

The [http://www.hrsdc.gc.ca/eng/jobs/student/loans_grants/index.shtml Government of Canada website] has information on student loans (which need to be paid back) as well as on student grants (which do not need to be paid back), and advice on repaying loans.

'''“Loan shark”''' is the slang term for individuals or businesses that lend money at a very high rate of interest. This kind of lender usually sets harsh repayment terms and may resort to threats or actual harm to the borrower if payments are missed (see the section on [[Harassment]]). Even if payments are made as called for, the borrower may end up owing more than was borrowed because of the high interest charges, which are calculated on a monthly or even weekly basis. Police and media reports indicate that there is a considerable underground credit market from loan sharks. [[Section 347https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-46/latest/rsc-1985-c-c-46.html#sec347_smooth|Section 347]] of the ''Criminal Code'' makes it an offence for someone to lend money at an interest rate exceeding 60% per year (see the section on [[Interest and the Cost of Borrowing Money]]), except [[Payday Loans|payday lenders]] licensed under provincial legislation.

Mortgage brokers negotiate '''[[Mortgages and Foreclosure|mortgages]]''' with lenders on behalf of borrowers and, in some cases, extend credit on the strength of mortgages on land that they then “sell” to a third party who receives the monthly payments from the borrower.

If a client already has a mortgage from a broker and is now having trouble meeting their obligation, the client should consult a lawyer on the various [[Debtor’s Options for Getting Out of Debt|remedies available]].

Until April 2002, '''pawnbrokers''' were regulated by the province under the ''Pawnbrokers Act''. Some aspects of the ''[http://canlii.ca/t/8495 Personal Property Security Act]'' (see the section on [[Security Agreements]]) also apply to pawn transactions. Currently, however, the most significant regulation of pawnbrokers is found in municipal bylaws, such as Vancouver’s [http://bylaws.vancouver.ca/2807c.PDF Secondhand Dealers and Pawnbrokers By-law] (No. 2807).

A typical client problem with pawnbrokers is when the client cannot repay the amount of the loan, the interest, and the pawn fees to redeem their possession. In some cases, the effective rate of interest — because it includes pawn fees — exceeds the maximum rate of interest of 60% per year set by [https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-46/latest/rsc-1985-c-c-46.html#sec347_smooth section 347] of the ''Criminal Code''. Pawnbroking does not fall within the legal exemptions created by payday loan legislation.

Certain finance companies make small, short-term, high-interest loans that go by a variety of names: payday loans, cash advance loans, post-dated cheque loans, etc.

As of November 1, 2009, the [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec112.01_smooth ''Business Practices and Consumer Protection Act''] was amended to add a new part specifically to lay out the legislative framework dealing with payday loans. The details of this framework are discussed in the section on [[Payday Loans|payday loans]].

Some businesses lend people money if the borrower assigns their income tax refund to the lender. The lender calculates the refund and pays the borrower part of the expected refund in cash. The lender then collects the entire refund at a later date.