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Difference between revisions of "Direct Sales, Future Performance, and Time Share Contracts (11:V)"
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Direct Sales, Future Performance, and Time Share Contracts (11:V) (view source)
Revision as of 21:02, 4 October 2022
, 21:02, 4 October 2022→3. High-Cost Credit Products
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High-cost credit products, set out in part 6.3 of the BPCPA, are loans or lines of credit that charge high interest rates and/or various fees. The formal definition of a '''High-Cost Credit Product''' is: | High-cost credit products, set out in part 6.3 of the BPCPA, are loans or lines of credit that charge high interest rates and/or various fees. The formal definition of a '''High-Cost Credit Product''' is: | ||
:a) A fixed credit product that has an APR that exceeds the prescribed APR and meets other prescribed criteria; | :(a) A fixed credit product that has an APR that exceeds the prescribed APR and meets other prescribed criteria; | ||
:b) An open credit product that has an annual interest rate that, calculated in accordance with the regulations, exceeds the prescribed annual interest rate and meets other prescribed criteria, | :(b) An open credit product that has an annual interest rate that, calculated in accordance with the regulations, exceeds the prescribed annual interest rate and meets other prescribed criteria, | ||
:c) A lease that has an APR that exceeds the prescribed APR and meets other prescribed criteria, or | :(c) A lease that has an APR that exceeds the prescribed APR and meets other prescribed criteria, or | ||
:d) A prescribed product through which credit (e.g. a loan) is extended by a high-cost credit grantor to a borrower (e.g. the consumer) primarily for a personal, family or household purpose, but does not include a payday loan, mortgage on real property or prescribed credit product. | :(d) A prescribed product through which credit (e.g. a loan) is extended by a high-cost credit grantor to a borrower (e.g. the consumer) primarily for a personal, family or household purpose, but does not include a payday loan, mortgage on real property or prescribed credit product. | ||
:'''NOTE:''' Because interest rates can be compounded (interest on interest) at different frequencies (usually monthly, but can also be annually, semi-annually, quarterly, weekly, daily, or even continuously – which is set by the lender as a term of the contract for the loan or other credit arrangement), annual percentage rate (APR) is the convention for quoting interest rates on an annual basis. Since legislation also expresses interest rates in APR, this allows one to directly compare the APR-quoted interest rate from the contract to the APR-quoted limit in the statute. | :'''NOTE:''' Because interest rates can be compounded (interest on interest) at different frequencies (usually monthly, but can also be annually, semi-annually, quarterly, weekly, daily, or even continuously – which is set by the lender as a term of the contract for the loan or other credit arrangement), annual percentage rate (APR) is the convention for quoting interest rates on an annual basis. Since legislation also expresses interest rates in APR, this allows one to directly compare the APR-quoted interest rate from the contract to the APR-quoted limit in the statute. | ||