Debt & Savings
There's a Booming New Market for Loans With 1,800% Rates
Canada has seen a surge in unlicensed lenders targeting vulnerable borrowers since capping interest rates. Trump has proposed a similar move in the US.
By the time Laura Pelletier took out a two-week loan in November at an equivalent annualized interest rate above 1,800%, she was already deep in debt. She had started borrowing from online lenders two months earlier to cover the cost of caring for her brother, who was recovering from a near-fatal motorcycle crash in another city.
Pelletier, 47, lives in Ottawa, but almost none of the lenders she used were licensed in her home province of Ontario, and the cost of the loans far surpassed what was allowed by regulators. Soon, the only way to keep current on one debt was to take out another.