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3-month payday loans in Canada: What you should know
Payday loans in Canada are regulated to have a maximum term of 62 days. See which payday loans have terms up to 62 days, plus your alternatives to 3-month payday loans.
Three-month payday loans in Canada do not exist because payday loans can only have a loan term of up to 62 days. You’ll need to turn to a different type of financing if you need 3 months to pay it back.
High-cost payday loans are unsustainable for borrowing over a continued period of time and are expensive as a means of longer-term borrowing. View payday costs and regulations by province here. If you're experiencing financial hardship call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). You may also want to consider payday loan alternatives.
Compare payday loans
The payday loans below have terms up to 62 days.
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Maximum borrowing costs of payday loans per province
Always refer to your contract for exact repayment amounts and costs.
Province
Max. cost of borrowing a $100 payday loan
Cooling off period to cancel loan
Max. penalty for returned cheque or pre-authorized debit
Alberta
$15
2 business days
$25
British Columbia
$15
2 business days
$20
Manitoba
$17
48 hours excluding Sundays and holidays
$20
New Brunswick
$15
48 hours excluding Sundays and holidays
$20
Newfoundland and Labrador
$14
2 business days
$20
Nova Scotia
$15
Next business day (2 days for online loans)
$40 (default penalty)
Ontario
$15
2 business days
$25
Prince Edward Island
$15
2 business days
N/A
Quebec
Limit of 35% AIR
N/A
N/A
Saskatchewan
$17
Next business day
$25
Payday loans are regulated
When you’re grappling with a financial emergency and you don’t have a rainy-day fund, payday loans can offer Canadians quick access to a small sum of cash of up to $1,500. Payday loans are regulated at the provincial level in the provinces and at the federal level in the 3 territories. Each province has unique rules about how much can be charged per $100 borrowed, how many loans you can take out at one time and how long you can borrow for. No matter where you are in Canada, payday loans are only meant to last until your next payday, which means the typical loan term will be 1 to 4 weeks.
Compare alternatives to 3-month payday loans
If you need short-term financing, below are some alternatives to 3-month payday loans.
1. Installment loans
Installment loans are a specific type of personal loan with smaller loan amounts, shorter terms and higher interest rates than standard personal loans. They also have more lenient requirements. With this loan, borrowers make repayments in installments over a period of time, usually between 6 months to a couple of years, but there are some lenders that can offer 3 months.
Some installment loans are available to borrowers with poor credit. Check the lender’s requirements before you apply.
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2. Personal line of credit
If you need a 3-month loan, you may wish to consider opening a personal line of credit. It works almost like a credit card, giving you a specified credit limit to use how you like and stays open as long as you keep up with payments. The funds are there for you whenever you need them, and interest is only charged on what you withdraw so you can keep the account in your back pocket without making any payments or incurring any charges.
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3. Credit card
If you have available credit (and enough of it), you could potentially use your credit card to cover your expenses. Credit cards typically come with interest-free grace periods of at least 21 days – which means, at minimum, you won’t have to pay any interest until 21 days later. Credit cards usually come with APRs of approximately 19.99% – which means you’ll want to pay off your balance as quickly as possible. You could avoid high interest rates by applying for and using a low interest credit card.
You may even be able to open a new credit card with a 0% interest promotional period of about 3 to 6 months, which would cover your needs. Just make sure you have the funds to repay your credit card balance so you won’t have to deal with the interest rate that kicks in after. Learn more about credit cards.
4. Friends or family
You could potentially turn to friends or family to borrow some extra cash for 3 months. There are plenty of apps and websites that allow you to draw up a contract, which can ensure you make timely repayments and can help keep your relationship intact.
Features to consider with 3-month loans
Before you apply for a 3-month loan, take the time to compare different lenders and loan options. Here are some factors that you should take into consideration:
Know the fees involved. APRs for personal loans can range from as low as 4.5% to well over 36%. The APR that you’re offered will depend on multiple factors including your credit score, the amount you’re looking to borrow, your repayment period and the lender that you’re applying with. You’ll also want to watch out for any additional fees, including origination fees and late payment and prepayment charges. Paying off your loan early may be a key priority, so make sure your lender doesn’t charge you any penalties for early repayments.
What kind of repayment flexibility is there? While it depends on the lender, you’ll typically have a loan term anywhere from 3 months to several years. Decide on terms that fit your budget. You don’t want to overcommit too much of your monthly income towards debt repayments, but you also don’t want to extend the life of your loan for longer than you need to.
What is the processing time? Applying for a payday loan is generally a quick process – especially if you do it online. With in-person applications, you could receive your loan within a few days, while applying with an online lender could see you with loan funds within just a few short hours.
The bottom line
Three-month payday loans in Canada may not exist, but you can turn to other short-term financing options to cover your expenses. These options include using an installment loan or a credit card, or borrowing money from friends or family members. Always compare your options before you apply for a loan. Do your research and compare lenders, loans, fees and repayment terms. If you think you’ll be able to pay off your loan in less than 3 months, look for a lender that charges no prepayment fees.
Frequently asked questions about 3-month loans
Taking out a 3-month loan will show on your credit report, but provided you keep up with repayments your credit score shouldn’t be affected. In fact, showing you can repay loans on time is generally a good sign to future lenders. It is possible, however, that future potential lenders will see a loan in your credit history as a sign of financial difficulty or disorganization. It’s important to only ever take out a loan if you’re certain you can meet the repayment schedule. If you default on repayments then your credit score could be severely damaged, making it harder to secure credit in the future.
Some lenders offer borrowing amounts up to $50,000 or even $100,000, but how much you can borrow personally will depend on your finances.
Some lenders will allow you to repay your loan early without charging you any penalties or extra fees, but it is common for some lenders to charge prepayment fees – so always check the terms and conditions of your loan. If you’re able to pay your loan back early and won’t be charged any additional fees, you’ll save money by avoiding some interest charges.
As well as proof of ID, you are likely to need to provide details on some or all of the following: employment, income and expenditure, bank account, contact info.
You will be credit-checked before you’re approved for a loan, and it is possible that some lenders will decline your application if you have bad credit. However, there are some installment loan lenders that will lend to those with bad credit, but you should expect to pay interest rates as high as 47%. Read through our full guide to getting personal loans with bad credit here.
If your application is declined you can generally try again at any time, but the outcome is unlikely to change unless your circumstances have. Remember that seeing multiple applications for credit in a short space of time on your credit report could put off prospective lenders in the future.
Emma Balmforth is a producer at Finder. She is passionate about helping people make financial decisions that will benefit them now and in the future. She has written for a variety of publications including World Nomads, Trek Effect and Uncharted. Emma has a degree in Business and Psychology from the University of Waterloo. She enjoys backpacking, reading and taking long hikes and road trips with her adventurous dog.
Borrowing $100 can be a quick and easy process. This guide covers how you can get a small loan in Canada, including benefits, drawbacks and eligibility requirements.
Read our guide to payday loan regulations in your province or territory.
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