When you borrow $10 from a friend or family member, you pay back the same amount, i.e., $10. But if you borrow from a Caisse populaire, you have to pay interest which means that you’ll have to reimburse a bit more than $10.
Example :
The total cost of a credit purchase depends on the following:
- amount borrowed
- interest rate
- term
Amount borrowed | Interest rate |
Term |
Interest paid |
$2 000 |
10 % |
2 years |
$215 for a total of $2 215 |
$2 000 |
10 % |
4 years |
$435 for a total of $2 435 |
Tips on paying less interest
- Pay back your loans as soon as possible: as a result, you’ll get a good credit rating and save on interest.
- If possible, don’t borrow money!