Have you heard about the new rules limiting the fees and interest that licensed money lenders may charge? See a comparison of the old rules versus the new rules below. These new rules are expected to dramatically reduce total borrowing costs for borrowers.
| Previous Practice | From Oct 1 2015 |
| No upfront administrative fee | 10% maximum upfront administrative fee |
| 20% maximum effective interest rate (EIR) per year for borrowers earning less than $30,000 per year No interest rate cap for borrowers earning $30,000 per year or more | 4% maximum nominal interest rate (NIR) per month |
| Late interest tagged to interest rate per month | 4% maximum late interest rate per month |
| No cap on late fees | Late fees capped at $60 per month |
| Additional fees allowed in some situations | No additional fees allowed |
| No cap on total borrowing costs | 100%* cap on total borrowing costs |
| NOTE: *Of loan principal EIR takes into account the compounding effect of the frequency of installments over a one-year period NIR is the stated interest rate, without taking into account the compounding effect | |
Source: Ministry of Law
For more information see the Registry of Moneylenders Loan Guide, find a moneylender who is right for you or submit a loan inquiry!
