A contract for the loan of money allows you to borrow money for a fee known as “credit charges.” The law stipulates the contents of the contract.
The information presented in this section does not apply to mortgage loans or loans entered into for the payment of an insurance premium.
Types of lenders
A loan is usually granted by a financial institution, such as a bank or a credit union. A loan may also be granted by a financing company or a pawnbroker.
Characteristics of a money loan
You are free to use the borrowed money as you wish. Some credit contracts are linked to a specific item, but this is usually not the case with contracts for the loan of money.
If you use the borrowed money to buy an item, you are the owner of that item. The contract does not make the lender the owner of the item you have purchased. The lender could, however, keep an item as security for the loan.
Types of money loans
Money loans can take several forms. The page titled Examples of Money Loans explains the characteristics of a few types of loans.
Last update : October 23, 2020
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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.