Important Tips for Canadian Borrowers

What You Should Know Before and After Getting a Loan

If You’re Struggling to Make a Payment

Once your loan is approved and funds are received, it’s important to keep up with your repayments. If you think you might miss a payment for any reason, contact your lender right away. Most lenders will work with you to reschedule payments or explore other options before taking any action.

Reaching out early can help you avoid extra fees or negative marks on your credit report. Keep in mind that changing your repayment plan may come with additional costs or interest, so always confirm details directly with your lender.

If you do not contact your lender and your payments remain overdue, your account may be passed to a licensed collection agency. Some lenders may also use a “Continuous Payment Authority” to attempt repayment through your credit card, in line with your loan agreement and for up to 90 days after your due date.

When Payments Are Missed

Missing a payment can lead to penalties, added fees, and a lower credit score. Your lender may contact you by phone or email to discuss repayment options, but it’s best to reach out first if you know you’re going to have trouble paying on time.

If your lender reports late or missed payments to a credit bureau, it could make it harder to get credit in the future, such as for a mortgage, car loan, or credit card.

Key Things to Remember

• Only borrow money if you’re confident you can repay it on time.
• Contact your lender as soon as possible if your financial situation changes.
• Paying late or missing payments can lower your credit score and lead to added costs.

If your loan remains unpaid, your lender has the right to recover reasonable legal costs or court fees involved in collecting the debt, as outlined in your loan agreement.

Renewing or Applying for Another Loan

Some lenders may allow you to renew or reapply for another installment loan, but avoid taking on new debt if you are already struggling with existing repayments. Always make sure you can afford to repay a loan fully and on time before applying.

If you are borrowing to pay off another loan, it’s better to speak to your lender first. They may offer payment assistance or adjusted terms to help you get back on track.

If you cannot reach an agreement with your lender, you can contact a local credit counselling service or a financial advice organization for free help and guidance.