Seven years after Donna Borden borrowed $10,000 from CitiFinancial, she says she had made $25,000 in payments вЂ” and was still no further ahead.
She complained to regulatory authorities, went to credit counseling for help. But nothing seemed to make much of a dent in the loan.
The interest rate on the loan was nearly 30 per cent, insurance premiums in excess of $2,600 were added to her debt, and Borden alleges the loan was then вЂњflippedвЂќ numerous times for reasons she says are unclear to her.
вЂњI was working seven days a week trying to pay these debts off. I realized it was physically impossible,вЂќ the 52-year old administrative assistant from Toronto said in an interview.
CitiFinancial does not charge additional fees at the time of signing, the email also says. Disclosure documents provide the borrower with information related to all payment terms. This includes the specific time required to repay a loan, provided no payments are missed. Customers are also able to prepay personal loans without extra fees, the email also said.
In 2008, Borden says she entered a debt repayment program at Credit Canada, a non-profit agency that helps customers manage their finances. By then, she owed $30,000 to various creditors.
Credit Canada negotiated repayment terms on her behalf. Most lenders will agree to waive their remaining interest charged on a debt, said Laurie Campbell, executive director of Credit Canada. However, the decision is voluntary.
Documents Borden provided show CitiFinancial agreed only to reduce its interest rate to 15.5 per cent. It also extended her loan to 2015. (more…)Read More