Ever since the pandemic, installment loans have become more and more necessary for Canadians. In the last couple of years, about 44% of Canadians who have high-cost credit took out a loan like this. If you are someone who could use a little extra money, you may be looking at what quick installment loans are out there.
However, you should know that there are rules and regulations that Tekaloan and other similar companies have to follow for this. Read on to find out more about what these rules and regulations are.
Displaying Rates and Fees
One of the main rules that lenders have to follow is that there are certain requirements for displaying rates and fees.
For physical businesses, there have to be clear signs that are a certain size which display what the exact rates are. On a website, this has to be clearly visible with the font in a color that contrasts with the background color of the website.
Then, you have to get to the contract itself. The clauses in that contract need to clearly state what the financial terms of this loan are.
Information that you need to include as some of the top lines in the contract are what the principal amount is for the loan, how long you have to pay the loan back, what the annual percentage rate (APR) is, what the total cost of the loan is going to be, and more.
These rules are in place to ensure that the borrower has a full understanding of the terms and conditions that are in place for this type of loan. This gives legal protection for both sides.
The lender can claim that they laid the terms out for their loan clearly, and the borrower can have a clearer understanding of what they are getting into before they sign the dotted line.
Permits
Another thing that you need to consider is if your lender has a legal permit to do this. You need one to be a qualified borrower in Canada, so make sure that your lender has one before moving forward.
When dealing with online loans, this essentially has to be displayed somewhere on the lender’s website. The information that this should include is the name of the business, the permit number, when the permit expires, and more.
Look for this information on the lender’s website and see if it matches up with what is legally required.
Repayment Deadline
For these types of loans, it is common that people are looking to get loans in advance of their upcoming paycheck. They may not be able to wait for the money and instead ask for an advance in the form of a loan.
This is all well and good, but there are regulations as to when a lender can ask for that type of loan to be repaid. In Canada, the legal requirement is that lenders are not allowed to ask for repayment before somebody gets their paycheck.
Check to see what day you are supposed to get paid before accepting this type of loan. Then, make sure that you do not have to pay your loan back before getting that paycheck.
Changes
Another thing that a lender needs to consider is if they want to make any changes to the terms and conditions they offer a borrower. Lenders are not allowed to just suddenly do this with no notice.
They have to go through a process and make sure there is enough written notice before changes like this are made. Typically, about 21 days’ notice is required before changes are legally allowed to take place.
On top of this, there needs to be certain changes written into the new contract. These changes include the interest rate, transaction fees, commissions, and any other fees that they may have.
Contingencies
Are you worried that you may only be able to secure a loan if you give into a contingency attached to it? If so, you do not have to worry because this is illegal in Canada.
There may be a situation where an illegal lender may try to force you to buy another product or service that they offer you to get a certain rate for the installment loan that you are trying to secure.
Just know that this is illegal, and lenders are not allowed to attach other products or services that they offer as part of the loan. If you are interested in another product or service that the lender offers, you need to keep this a separate transaction.
Maximum Amount Borrowed
Believe it or not, there is a maximum amount of money that a lender can agree to loan to a borrower under these specific circumstances. That is because, with smaller amounts of money, lenders are allowed to charge a higher interest rate to borrowers.
How much money can lenders give to borrowers then? For these types of loans, lenders can loan borrowers up to $1,500 in Canada.
That means that most of these loans are going to be micro-loans that allow borrowers to temporarily get by.
However, these loans tend to have a much higher interest rate than a typical personal loan. In some cases, the APR could be even higher than what you would find on a credit card.
Having this type of protection in place ensures that borrowers do not get killed by the interest rate. Review this carefully and make sure the amount you are asking for is below $1,500 if you find yourself with a high interest rate.
Get Quick Installment Loans
These are some of the biggest rules and regulations in Canada that you need to know about quick installment loans.
Loans like this are likely going to be for a small amount of money that allows a borrower to temporarily get by. As a result, Canada has a maximum amount of money borrowed set in place for these types of loans and requires lenders to clearly state all of their terms and conditions.
Do you need a fast loan? Fill out this form to see if you get approved.