How does Canada Post’s “My Money Loan” program work?
Canada Post will now deliver more than mail. Last week, the National Postal Service launched a My Money Loan program in conjunction with TD Bank Group.
“We believe this is the best way to provide Canadians with greater access to financial services, especially underserved Canadians,” said Michael Yee, Vice President of Financial Services at Canada Post, in an interview. before launch.
The loans, which range from $1,000 to $30,000, fill a gap between payday lenders and traditional banks. The loans will come with interest rates set by TD, but customers don’t need to have a bank account and may be new to credit.
Borrowers have a choice of variable or fixed interest rates, Canada Post said on its online lending page. Variable interest rates ranged from 9.78% to 19.78%, while fixed interest rates ranged from 9.98% to 19.98%.
Flexible repayments can be spread over terms from 1 to 7 years and borrowers can repay their loan at any time without additional costs.
Choice of repayment options include regular weekly, bi-weekly, monthly, or semi-monthly payments.
Canada Post says there is no charge unless a payment is missed.
Additionally, if there are insufficient funds in the account when the payment is withdrawn, an insufficient funds (NSF) fee will be applied.
Once a borrower has accepted the terms and activated their loan, TD transfers the funds by direct deposit into their account at any Canadian financial institution. If approved, funds could be received within 1-5 business days.
The Postal Service has been running pilots for the loan program, called MyMoney, since last year and in recent weeks it has scaled it up to the roughly 6,000 post offices nationwide. Customers used the loans for unexpected emergencies like car repairs or vet bills, as well as consolidating debt for higher-interest products, Yee said.