The Blog

I hate payday loans. I think they are a burden to society because they prey on the poor and the uninformed. The Globe and Mail has an excellent but lengthy article on payday loans in Canada. The link is provided after my summary. Also there is a link to a video from John Oliver who gave a comedic rant about payday loans in the US. It is quite insightful. The article is saying that more and more people are using payday loans. A major credit-counselling agency is seeing more clients walking through the door with payday loans needing help. This is especially true for seniors. 45% of their clients over the age of 60 are holding payday loans in 2014. It was 20 per cent

I just came across an article in the LA Times that has the title “What happens if you close an unused credit card account? The article basically says keep the number of cards that you have to a minimum and that you should close card accounts that you do not use. Two cards should be enough. You might take a small hit on your credit temporarily but it should recover in a month or so. There is nothing wrong with the suggestions, but it is more complicated than that. Depending on how irresponsible you are with credit, you might need to cancel them all. The advice here is for responsible credit users and sets you up in the best possible light in most situations. First

There is a lot of confusion about the way multiple credit checks affect your credit rating. Not just amongst the general public but also people in the industry. I have spoken to mortgage lenders, mortgage brokers, leasing specialists and car loan professionals. And they have different answers to this question. Luckily I was able to speak with a regional manager at Equifax at a recent lender/broker event to clear this up. With recent technology implemented, Equifax now should know if the credit check is for a mortgage or a credit card. For mortgage inquiries, checks within a period of 1 to 4 months are counted as one. The time depends on which Equifax credit score you are talking about. Equifax have several versions of their

Only a few months since my last update and there are two new entrants into the space and a third one aiming for a 2015 start as well. GroupLend and Borrowell are the first two online lending platforms. Both provide consumer loans. I covered them last time. In February, Toronto-based Fundthrough opened for business as an alternative source for financing small to medium-sized businesses in Canada. It makes factoring or account receivables loans. Instead of basing the loan on your credit, it bases it on the credit worthiness of your customers amongst many other factors. So in the application, it is the list of customers and the current outstanding invoices that are most important. In April, OnDeck, a US online lender to small businesses, announced

Collateral mortgages are increasingly popular because it makes it harder for you to change lenders at the end of your term. The banks will tell you that this will allow them to extend different loans to you without additional legal fees. This is true, but at the same time it prevents anybody else from lending money to you based on the equity of your home. These mortgages are sometimes registered to 150% of the value of your home. If your home is worth $1,000,000 and you borrow $650,000, they can register a charge of $1,500,000 against your house. This means it will prevent you from getting a loan elsewhere based on the equity of your house now and far into the future. It is not

The First Entry into the P2P lending space in Canada is Grouplend out of Vancouver. In October 2014 Grouplend became the first company that has jumped through all the regulatory hoops so as to be able to offer peer-to-peer lending in all provinces except Nova Scotia and Quebec. And quickly following behind Grouplend is Borrowell, a Toronto peer-to-peer lending firm. The company is headed by Andrew Graham who led the insurance business at PC Financial. They received significant seed funding last year and plan to launch in Spring of this year. Both lenders seem to target people with good credit. This makes perfect sense for a business model that relies on steady pool of investor money. If the investors start loosing money, the pool of