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CRA and interest

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Topic: CRA and interest

Posted By: tkarmy
Subject: CRA and interest
Date Posted: 09/August/2012 at 4:40am

Anyone know what % of interest CRA charges once they get a hold of your loans? Trying to decide if it is worth while to pay them off with my line of credit and get my payments reduced

Thanks

Replies:

Posted By: footloose
Date Posted: 10/August/2012 at 11:50am

The Canada Revenue Agency ( CRA ) is the official collection agency for the Federal government. And like all collection agencies, the rate of interest charged is the rate stated in the original agreement. When you signed your student loan agreement, it will clearly state the base rate ( sometimes referred to as the "Bank Rate" ) plus an additional percentage. For example, today the "Bank Rate" is 3%. And to that rate is added another rate such as 5% bringing the total rate to 8%. This is referred to as a "Variable Rate" loan. It is called a "Variable Rate" loan because if the Bank of Canada increases the "Prime Rate" currently at 1%, then the banks will raise their "Bank Rate" and consequently, your total rate will also increase. On the other hand, you may have signed a student loan agreement that provides for a "Fixed Rate". That means that if the Bank of Canada raises its " Prime Rate", your rate will remain constant and will not be affected. Check your student loan agreement and there you will find the rate of interest that is being charged on your loan. If your student loan is a "Variable Rate" loan, check to see what the "Bank Rate" is as stated in the agreement. If the rate is other than 3%, supplement the rate stated to 3% and then add the additional rate.

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Educating one Consumer at a time

Posted By: tkarmy
Date Posted: 13/August/2012 at 4:52am

Cheers thanks for your help.

Posted By: SolveStudentDebt
Date Posted: 17/August/2012 at 6:47am

Consult with me before you tap out your tdsr on this. I have some ideas and good cost benefit for you.

Email Heather and she will set us up something if you want.

Johnny

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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

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