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In ON, what should I know about late payment fees for car loans?
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In ON, what should I know about late payment fees for car loans?

In Ontario, car loan agreements are primarily governed by the Consumer Protection Act, 2002, which strictly mandates that all fees, including late payment charges, must be clearly and conspicuously disclosed within your loan contract. Most lenders typically offer a grace period, often ranging from 7 to 10 calendar days past your scheduled due date, before any late fee is applied. The specific late fee amount, which must be explicitly stated in your agreement, is commonly a fixed charge, such as $25 to $50, or a predetermined percentage of the overdue installment. It is crucial for consumers to recognize that beyond the immediate financial penalty, consistent late payments severely damage your credit score, making it significantly more difficult to secure favourable interest rates or even approval for future financing, especially as economic conditions and lending criteria may tighten approaching 2025. Furthermore, a pattern of delinquencies can escalate to a loan default, potentially leading to vehicle repossession and additional substantial financial penalties. Therefore, always thoroughly review your specific loan agreement to fully understand the terms and conditions related to late payments, grace periods, and their potential long-term financial and credit repercussions.

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