Your Rights and Responsibilities: Loans

Applying for a loan, changing your loan agreement, loan payments

When it comes to loans, you have a right to have important information disclosed to you in a timely manner. If you have — or plan to get — a loan, a line of credit, a credit card or a charge card from a federally regulated financial institution, you should know the following:

• Financial institutions are required to provide you with information about the cost of borrowing and any charges or penalties that may apply.
  
  
• Financial institutions must express the cost of borrowing as an interest rate per year and, in certain circumstances, as an amount in dollars and cents.
  
  
• You are entitled to pre-pay a loan before it comes due, without penalty, unless the loan is secured by a mortgage on real property.
  
  
• You are not required to maintain a minimum credit balance, unless you agree to do so.
  

You should also know:

• the annual interest rate;
  
  
• how the interest is calculated;
  
  
• the grace period, if any;
  
  
• the date on or after which interest accrues;
  
  
• how often you will receive your statements;
  
  
• your minimum monthly payment or how this payment is calculated;
  
  
• your initial credit limit — unless the credit card issuer hasn't determined it yet (in this case, the issuer must give you this information with or before your first statement);
  
  
• any optional services available, such as credit balance insurance; the charges for each optional service; and the conditions for cancellation;
  
  
• any other charges or fees that apply.

What must be provided in an information box at the beginning of your agreement

After you have been approved and have agreed to the loan, the federally regulated financial institutions must give you a loan agreement. Below are examples of information the financial institutions must provide in an information box at the beginning of the following agreements.

• Credit card agreement
  
  
• Fixed loan agreement: mortgage
  
  
• Variable loan agreement: mortgage
  
  
• Line of credit agreement
  
  
• Fixed loan agreement: personal loan