Summary for the law
Typically, the debtor writes a personal cheque, post-dated by fourteen days and payable towards the loan provider for the total amount they would like to borrow plus a charge. The organization then provides the debtor the quantity of the cheque without the charge.
These loans were made on such terms that once all the interest, fees and charges were factored in, the result was often an effective rate of interest exceeding the maximum rate of 60% per year set by section 347 of the Criminal Code (see the section on Interest and the Cost of Borrowing Money) in the past. Continue reading