4.2.10 Rights and responsibilities

When you borrow money, you have certain rights and also certain responsibilities.

Your rights

• Lenders must provide you with detailed information about the cost of borrowing, including the interest rate per year and any fees, charges or penalties that apply. In some circumstances, they must express the cost as an amount in dollars and cents.
• You are often entitled to prepay a bank loan before it comes due, without penalty. (Note that this applies only to loans from a bank, not loans from other lenders.) Ask what prepayment privileges apply to your loan.
• You are not required to maintain a minimum credit balance, unless you agree to do so.
• After you have been approved and have agreed to the loan, federally regulated financial institutions must give you a loan agreement. (In Quebec, provincially regulated institutions must give you a contract of loan.)
• You have rights in relation to debt collection. To find out more about these rights in Canada outside Quebec, go to the Financial Consumer Agency of Canada’s information on Dealing with a debt collector. To find out about these rights in Quebec, visit the Office de la protection du consommateur.

Your responsibilities

• Repay all debts in full and on time.
• Do not borrow more than you can repay.
• Understand your loan agreement before you sign it.
• Read your account statements. Question any errors or anything you do not understand.
• Keep records in case questions arise about your loan agreement or repayments.

The Financial Consumer Agency of Canada oversees federally regulated financial institutions to ensure that they fulfill their responsibilities when they loan money. If you think your rights are not being met, Contact Financial Consumer Agency of Canada.