This Ontario man has spent years trying to pay off a $4,500 loan. He’s barely made a dent.

Rules cracking down on predatory lending came into effect in 2025, but they don’t apply to pre-existing high-interest loans. Pat Foran has one man’s story.

New rules to crack down on “predatory lending practices” came into effect on Jan. 1, 2025. These changes include a cap on payday loan fees and a reduction in interest rates on high-interest loans. However, the changes don’t apply retroactively.

One Ontario man is speaking out after he discovered his high-interest loan, which he’s been paying for the past five years, has barely budged.

“I called them to get a hold of them to see what the final amount would be on the loan. I figured it was a couple of hundred bucks that it would be it after five years,” said Terry O’Halloran, of Barrie.

O’Halloran runs a small engine repair business, and he had health problems five years ago, leading to a leg amputation.

He explained to CTV News that he needed to get a wheelchair and make modifications to his home, which was why he took out a $4,500 loan, which he was paying back at about $200 per month.

As he had never missed a payment, O’Halloran thought his loan would be paid off soon, but he admits he did not have the paperwork for the original loan because it was never sent to him.

“When I took out the loan, the photocopier was broken, and they said they would send it to me, but they never did,” said O’Halloran.

That’s when he found out that his loan was a line of credit, first taken with CashMoney, which was later taken over by LendDirect.

Attain Finance has since acquired LendDirect.

O’Halloran said he did refinance his loan once but was shocked to find out three-quarters of his payment was going towards interest, and he still owes $3,697.

“At $4,500, if you do the math, it comes out to close to $10,000 for a $4,500 loan,” O’Halloran said.

The criminal rate of interest that could be charged before Jan. 1, 2025, was almost 48 per cent. It’s now capped at 35 per cent interest. However, for those who had existing loans before the changes were made, they are still paying the higher amount.

In O’Halloran’s case, of the $196 paid each month, $147 of his payment is applied towards the interest, and only $50 is paid into the principal balance of the loan.

“I know there is no possible way to pay this thing, as the interest is going to keep adding on,” O’Halloran said.

CTV News reached out to LendDirect several times via email and telephone, but did not get a response. CTV News also reached out to Attain Finance but did not hear back from the institution.

According to the Credit Counselling Society, taking out payday loans, high-interest loans, or lines of credit can create a spiral of debt.

“The fact is, the interest rate is so high that they are difficult to pay off once you fall into them,” said Mark Kalinowski with the Credit Counselling Society.

As for O’Halloran, he says he still has to purchase medical supplies and has other bills to pay, and he regrets borrowing the money.

“If I pay it back, it would probably take me another five years. That’s going to put me at 71-years-old” said O’Halloran, who added, “that’s why I feel like I already paid this off, and now I’m starting back right where I started again. I really would like to see the loan vanish.”