Question:
I heard that there was a maximum amount of interest that can be charged. Reluctantly, I may have to offer some financing. I’m annoyed, but I will probably have to go ahead however, I would like to charge the maximum.
Answer:
The highest rate is 60% compounded yearly. It’s in the Criminal Code of Canada, so it applies to the entire country.
You have to be careful about the 60%, that is, for a full year. Also, it includes anything else you might charge for the loan, ie set up fees, expenses etc. If you make a mistake and accidentally go over, then, you cannot collect any interest at all.
Brian Madigan LL.B.,Broker