Avoid these Canadian loans at all costs

More Canadian lenders are pitching super high-interest loans as fast, convenient alternatives to traditional lending products, when in fact, they’re vastly more expensive. Baiting unsuspecting customers with access to easy cash and a solution to all their financial woes, these virtual lenders vilify “archaic” banks and “high-interest” credit cards. However, once the trap has been sprung, they offer Canadian loans that may ultimately cost a borrower double to 20 times what they would pay with a credit card.

In Canada, section 347 of the Criminal Code makes it a criminal offence to charge more than 60% interest per year. But that hasn’t stopped high-interest lenders from receiving a convenient loophole – allowing them to charge over 390% APR on a two-week loan in Ontario and British Columbia. Just because it’s a legal lending practice doesn’t mean it’s an ethical lending practice — or, for borrowers, a smart lending practice.

We’re going to show you two loan types you should do your best to avoid, and a few much cheaper alternatives you might want to explore.