Canada Post and Toronto-Dominion Bank will next week announce the national launch of MyMoney Canada Post Loan, a new personal loan product that adds to the wide range of financial products available across the country.
The company said in a statement that the move follows extensive market testing that demonstrated the product’s potential to meet the needs of a large segment of the population, including people with no credit history.
Canada Post, which recently announced it had a pre-tax loss of $160 million in the second quarter of 2022, had already announced its intentions and started offering loans ranging from $1,000 to $30,000.
The loans are offered at variable interest from 9.78% to 19.78% or fixed interest from 9.98% to 19.98% with a flexible repayment period of one to seven years.
Applicants have very few conditions to meet in order to access the loans.
You simply need to have Canadian residency, have a personal annual income of at least $1000, not have declared bankruptcy within the last two years and have a valid checking or savings account at a Canadian financial institution.
Last fall, TD Bank and Canada Post said the new partnership was part of a move to expand access to financial services for Canadians, including those in remote, rural and aboriginal communities.
Both companies believe that the loan can come in handy when unexpected and expensive expenses arise, such as car repairs or home renovations.
However, a quick calculation by Acadie Nouvelle shows that taking out a loan from the issuer has a price that should not be overlooked.
A person who wants to borrow $15,000 at a rate of 15% and repay it all within a period of five years will end up paying interest costs of no less than $6,268, or more than 40% of the loan’s value.