The Consumer Protection Act provides for the times and situations where you have the right to cancel a contract for the loan of money.
When such a contract is cancelled, both the lender and you must find yourselves back in the same situation you were in before the contract was entered into.
You may cancel a contract for the loan of money without having to pay any fees within 2 days following that on which you and the lender are in possession of a duplicate of the contract. You must:
- give the money back to the lender, if you have already received it; and
- notify the lender of the contract cancellation in writing, if you have not received the money.
If you have entered into a “high-cost” contract for the loan of money, you have 10 days to cancel it. Refer to the page on cancelling a high-cost credit contract for more details.
It is important to know that, if you cancel your contract within the prescribed deadline, the merchant is not allowed to file a bad report in your credit file.
You may also pay the balance owing of your debt, in full or in part, with no penalty. Doing so will save you credit charges.
Requesting the cancellation of credit charges
If a merchant fails to abide by the law and causes you harm, you can request that no credit charges apply.
You may file such a request, for example, if the lender:
- did not evaluate your ability to reimburse the loan but was required to do so;
- fails to abide by the legal requirements regarding the terms of payment;
- did not indicate the credit charges in the contract as required by law. This would be the case, in particular, where the credit rate was not indicated on an annual basis;
- lent you money without holding the required permit.
If you cannot come to an agreement with the lender about cancelling your credit charges, you can turn to the courts. If you win your case, the judge may decide that the credit charges already paid must be reimbursed to you, or grant you some other compensation.
Modifying the contract
The lender and you can agree to modify the contract for the loan of money (e.g. increase the amount of the loan). If this leads to an increase in the credit charges or rate you will have to pay, a new contract must be entered into. This contract must contain:
- a reference to the 1st contract (e.g. the contract number or the date on which it was entered into);
- the amount you have to pay, according to the 1st contract;
- the amount borrowed;
- the credit charges and the credit rate;
- your total obligation, i.e. the amount borrowed and the total credit charges;
- the terms of payment.
Last update : May 3, 2021
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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.
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