Last week, CBC’s Kathy Tomlinson made national headlines with her breaking story about TD charging car loan interest rates of 25%. Wow! Are you kidding me? The reaction was incredible and went viral. Over 4000 comments in just a few days.
Now, this doesn’t have anything to do directly with mortgages, but it’s relevant news given that TD is one of the largest BANKs in Canada. It also shows our Federal Govt’s lack of focus when it comes to different types of consumer debt. This should serve as a reminder that a BANK is a business. They aren’t your best friend. They want to maximize profits and are accountable to its shareholders.
The article reports that TD has approximately $14.3billion of indirect loans on its books brokered by dealers. With an estimated 25% of these loans being priced at subprime rates (subprime means higher rates for riskier borrowers), that would work out to around $500million in interest costs being collected by TD each and every year! Read the rest of this entry »