Thelenders.ca Pricing

The pricing structure of Thelenders.ca is primarily defined by its annual interest rate and associated fees. It’s vital to understand these components to grasp the true cost of borrowing. As previously highlighted, the presence of interest (riba) makes this service problematic from an Islamic perspective, irrespective of the specific rate.

Annual Interest Rate (APR)

The most significant component of Thelenders.ca’s pricing is its approximate annual interest rate (APR), which is stated as 32% APR. This is a very high rate, especially when compared to traditional bank loans or lines of credit.

• Monthly Equivalent: The website breaks this down further, stating that “If unpaid, the applicable interest rate is 2.66% per month (32% per year).” This monthly rate is applied to the outstanding principal.
• Context: For every $100 borrowed, you would pay $2.66 in interest per month, on top of the principal repayment. Over a year, this adds up significantly. A 32% APR means that for every $1,000 borrowed for a year, the interest cost alone could be $320, not including any other fees. This is substantially higher than the rates offered by conventional banks for personal loans, which typically range from 5% to 20% depending on the borrower’s credit score. Payday loan alternatives in Canada often cap at specific rates, but 32% remains at the higher end of non-traditional lenders.

Example Loan Cost Breakdown

The website provides a specific example to illustrate the cost:

• Loan Amount: $500
• Repayment Schedule: Every two weeks
• Number of Payments: 6 payments
• Payment Per Payment: $141.97
• Total Repaid: $847.38
• Interest: $58.54
• Implicit Brokerage Fees: The site states, “This information is given as an example and considers the brokerage fees added to the borrowed capital.” This implies that the $500 loan likely includes an upfront brokerage fee, which is rolled into the principal amount before interest is calculated. The difference between the original $500 and the principal that the interest is calculated on is not explicitly detailed, creating a degree of opacity regarding the initial costs.
  • Calculation Analysis: If the loan was truly $500 and the total interest was $58.54, the total repayment would be $558.54. However, the example shows $847.38 being repaid for a $500 loan. This significant discrepancy ($847.38 – $500 = $347.38 in total extra costs) suggests that the “brokerage fees added to the borrowed capital” are substantial, far exceeding the stated “interest of $58.54.” This is a critical point that potential borrowers must understand: the actual cost of the loan includes not just the stated interest but also potentially very high upfront fees that are implicitly financed. This makes the loan far more expensive than the “interest of $58.54” alone would suggest.

Additional Fees

Beyond the interest rate, Thelenders.ca outlines specific fees that can increase the cost of borrowing:

• Service Charge for Loan Acceptance: “A service charge is applicable if your loan is accepted.” The exact amount of this service charge is not explicitly stated on the homepage. This fee is added to the principal amount you borrow, meaning you are effectively paying interest on this fee as well.
• Insufficient Funds (NSF) Charge: “$55 service charge for insufficient funds.” If a scheduled payment bounces due to insufficient funds in your account, you will be charged an additional $55. This can quickly exacerbate a difficult financial situation. According to data from the Financial Consumer Agency of Canada, NSF fees across Canadian financial institutions generally range from $45 to $48, making Thelenders.ca’s $55 fee comparatively high.
• Collection Costs: In case of non-payment, the debtor is responsible for “All judicial and extrajudicial costs that could be reasonably incurred by the creditor as a result of defects in a contract by the debtor.” This means any legal or administrative costs associated with collecting the debt will be passed on to the borrower, adding further to the overall cost.

In summary, while the 32% APR is high, the additional service charges, particularly the unstated upfront “brokerage fees” embedded in the loan principal, make Thelenders.ca’s loans extraordinarily expensive. This opaque fee structure and the involvement of riba make it a highly unfavourable and ethically problematic option.

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