Canada Post is now offering loans: Here is how the program works

The Canada Post logo is seen on the outside of the company's Pacific Processing Centre, in Richmond, B.C., June 1, 2017. THE CANADIAN PRESS/Darryl Dyck

Canada Post has launched a new loan program with TD Bank Group in an effort to offer Canadians more financial options.

Called MyMoney, the program began as a pilot project last fall before expanding nationally. It has been pitched as a way to offer more choices to those living in rural, remote and Indigenous communities.

Canada Post already offers money transfer services, as well as pre-paid reloadable credit cards.

WHAT KIND OF LOAN CAN I APPLY FOR?

Applicants can borrow between $1,000 and $30,000 through MyMoney under variable or fixed-rate loans, with repayments spread out over one- to seven-year terms.

Variable interest rates rise or fall depending on changes to the prime rate, while a fixed rate stays the same for the term of the loan. Ultimately, a person's loan rate will depend on factors such as an applicant's credit history.

Variable interest rates currently range between 9.78 per cent and 19.78 per cent, compared to 9.98 per cent and 19.98 per cent for fixed interest rates.

Repayments can be made weekly, biweekly, monthly or semi-monthly.

Fees are not charged unless a repayment is missed and loans can be paid down whenever without additional charges.

CTVNews.ca has reached out to Canada Post for a comment on what happens if a person is still unable, or chooses not, to make their loan repayments.

AM I ELIGIBLE?

Canada Post lists a number of requirements to be eligible for a MyMoney loan.

An applicant must be either a Canadian citizen or permanent resident, an adult and have a personal annual income of at least $1,000.

An applicant also must not have declared bankruptcy or had accounts in collections for past due payments in the last 24 months, and needs to have a valid chequing or savings account in their name with a Canadian financial institution where loan funds can be deposited. Loans cannot be acquired for a third party.

The loans are also described as "unsecured," meaning they do not need to be backed by collateral such as property and instead are based on an applicant's credit.

HOW DO I APPLY?

Prospective applicants can apply on the Canada Post website or by phone.

Applicants will be asked to verify their identities and may have to do so in-person at a Canada Post office.

Other details required in order to apply are gross annual income before taxes and monthly housing costs, including mortgage or rent payments, property taxes and heating expenses.

A social insurance number is not required to apply but will help in obtaining credit information, Canada Post says.

Once a loan is active, TD will transfer the funds by direct deposit between one and five business days.

Applicants do not need to be an existing TD customer to apply.

With files from The Canadian Press