Introduction to Cost Borrowing

Canadian rules and regulations governs how lenders must disclose the cost of credit to borrowers. Cost of credit disclosure is regulated to ensure that borrowers are presented with clear and straightforward information about the true total cost of any credit agreement that they enter into.

Cost of Borrowings disclosure is the process by which the lender informs the borrower of what the cost of credit is or will be in any given credit agreement.

A key feature is calculating an annual percentage rate (APR). APR includes non-interest charges a lender would levy. The APR figure will make FI easier to evaluate the true cost of a loan to compare with the true cost of the borrowing among various lenders.

The Cost Borrowing functionality has the following benefits:

• Ability to evaluate the true cost of a loan
• An itemized statement that describes each lending product and discloses each amount credited or charged, including interest and dates when those amounts are posted to the account
• Ability to display the sum of payments, interest and other charges

Click here to understand the terms and abbreviations used in this functionality.