New rules on fees and interest take effect October 1, 2015

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.

New controls on borrowing
Previous PracticeFrom Oct 1 2015
No upfront administrative fee10% 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 month4% maximum late interest rate per month
No cap on late feesLate fees capped at $60 per month
Additional fees allowed in some situationsNo additional fees allowed
No cap on total borrowing costs100%* 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!