Here’s what happens to $1K in credit card debt when you make only minimum payments
Zane’s loan, for example, is from Easyfinancial, a division of Goeasy, a Mississauga, Ont.-based alternative lender that counts more than 400 retail locations across Canada. The public profile of the lenders that offer high-interest personal loans is also often quite different from that of payday lenders. But they also allow Canadians to borrow up to tens of thousands of dollars for terms of up to several years, sometimes resulting in consumers paying more in interest than they received through the loan payout. High-interest installment loans, on the other hand, are subject to the 60 per cent limit on interest. Canadians cannot borrow more than $1,500 through a single payday loan and usually must pay the loan from their next paycheque, according to the Financial Consumer Agency of Canada (FCAC). But they are also small, short-term loans - and often tightly regulated. Payday lenders are exempt from federal rules capping the maximum annualized interest at 60 per cent and can charge interest rates of up to 500 or 600 per cent. One man’s cautionary tale about ‘savings loans’
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