Payday loans in British Columbia
You'll pay a maximum of $15 in fees for every $100 you borrow.
Payday loans are short-term loans that are meant to cover unforeseen emergency expenses between paycheques. These loans are the least affordable way to get your hands on money, but can be convenient and easy to get if you need a quick solution to make ends meet.
We’ve designed this guide to help you navigate the ins and outs of cash advance payday loans in British Columbia, so that you have as much information as possible to make an informed decision before signing on the dotted line.
Can I get a payday loan in British Columbia?
Yes, payday loans are legal in British Columbia. Each province has its own rules that regulate payday loan terms and costs. The Consumer Financial Protection Action Plan helps protect people in British Columbia who take out payday loans.
Here are the rules surrounding payday loans in British Columbia:
- You can’t be charged more than $15 in fees for every $100 borrowed.
- A lender can charge additional fees if you don’t pay your payday loan on time.
- The maximum amount you can borrow is $1,500.
- The maximum term for this type of loan is 62 days.
- You can only take out one payday loan at a time.
- You can’t borrow more than 50% of your paycheque.
- Lenders cannot ask you to sign a form that transfers your wages directly to them.
- A lender is not allowed to sell you insurance for your loan, nor can they require it.
- Payday loans are always unsecured – you should never pay money upfront to cover a deposit to secure your payday loan.
- Should you change your mind and cancel your payday loan, you’ll have two days to do so without facing a penalty.
- Roll-over loans are not allowed in BC. This means you can’t pay off your payday loan by taking out a second payday loan.
⚠️ Warning: be cautious with short-term loans
If you're experiencing financial hardship and would like to speak to someone for free financial counselling, you can call Credit Counselling Canada on 1800 007 007. It's open from 8:00am to 5pm, Monday to Friday. When comparing short-term loans, ensure you take into consideration all fees, charges and interest to understand how much your loan might cost in total.
Alternatives to short-term loans
Consider these alternatives before applying for a payday loan:
- Use online Government resources. The Financial Consumer Agency of Canada website demonstrates how small amount loans work – and suggests alternative options that may help you.
- Payment plans. Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan or receive an extension on your due date if you’re behind on payments.
- Contact your creditors. Speak with creditors about extending the due date of your payment, or working out a new payment plan that works for both of you. Seek personal loans elsewhere. Consider a small personal loan from a bank or a credit union. You may qualify for a loan with much lower interest rates than those offered by payday loan companies.
- Pay with credit card. Consider paying with your credit card to cover your emergency bills or payments. This is not a long term solution, as you’ll need to pay off the balance as soon as possible, but it’s an alternative to a short term loan with high – and immediate – interest rates.
Cash Money Payday Loan
- Minimum loan amount: $100
- Maximum loan amount: $1,500
- Interest Rate: Varies by Province
- Fees: Up to $17 per $100 borrowed (rounded to nearest dollar)
- Loan term: 12-14 days. Varies by Province
- Turnaround time: Within 2 hours with INTERAC e-Transfer® if approved
- Key requirements: Be 18+ years old, provide proof of recurring income
Fast facts about payday loans in British Columbia
- Maximum loan amount: $1,500
- Minimum loan term: 1 – 2 weeks
- Maximum loan term: 62 days
- Maximum cost: $15 for every $100 that you borrow
Compare payday loans in British Columbia
Check the website of any provider you’re interested in to confirm they operate in your province.
What fees will I have to pay?
British Columbia allows lenders to charge up to $15 for every $100 borrowed. Payday lenders can’t give you a loan for more than 50% of your paycheque and the loan agreement must list all of the charges, terms and conditions of the loan.
Example: If your previous paycheque is $1,000, the most you can borrow is $500. If you take out a 14 day payday loan, the chart below shows you the maximum you can be charged.
|Paycheque||Max loan||Max charge||Cost of interest||Repayment Amount||APR (%)|
|$1,000||$500||$15 per $100||$75||$575||391.07%|
You have two business days to cancel a contract for a payday loan without having to pay a fee. If your payday loan isn’t paid on time, you’ll likely be on the hook for additional fees and your loan will accumulate interest, making your financial situation worse.
The table below shows the fees you will pay for a payday loan versus a credit card and a line of credit.
|Loan Amount (over 2 weeks)||Payday loan fee||Credit card fee (23%)||Line of Credit (7% + $5 fee)|
Can I get a no credit check loan in British Columbia?
Most lenders won’t do a credit check when issuing a payday loan. Instead, they’ll be more interested in you having:
- An active chequing account
- A permanent address (and proof of it)
- Three months of continuous employment (and proof of it)
This lenient criteria can be easy to meet – with the added bonus of not having to prove you’re a responsible borrower. However, some lenders who don’t do credit checks might be more likely to be predatory and illegitimate. This is why it’s important to do your research and use a reputable lender – whether they do a credit check or not.
What should I keep in mind before applying?
Payday loans are the most expensive type of loan you can take out, with high fees and short-term repayment conditions. Before applying for a payday loan, consider alternative forms of financing.
If you do decide to take out a payday loan, it’s important to borrow only as much as you’ll be able to repay and to budget your repayments accordingly. If you default on your loan or the loan goes into collections, you’ll receive a negative mark on your credit report that can stay there for up to six years. Make sure to budget for the amount of money you plan to take out, and use a licensed lender.
How can I tell if a lender in British Columbia is legit?
The best way to make sure a lender is legit is to check their credentials with Consumer Protection BC. Look for the following signs to make sure you’re working with a reputable business:
- The lender displays a British Columbia licence number. Contact Consumer Protection BC at 1-888-564-9963 to check if a lender is licensed in the province. They should also display their license number online and at all physical locations.
- The lender displays costs. Payday loan lenders must display posters showing the rates they charge.
- It doesn’t allow roll-overs or multiple loans. British Columbia law doesn’t allow payday lenders to give out multiple loans.
- It provides same-language contracts. Your lender only provides contracts in a language you can speak comfortably.
- It follows consumer protection laws. Stay away from lenders who charge more than $15 per $100 borrowed.
Watch out for unlicensed lenders
The Internet has made it easier than ever to get access to payday loans. Some lenders may be across the country or even across the world – which means they’re illegally distributing loans in BC. If you’re thinking about taking out an online payday loan in BC, make sure that you’re dealing with a licensed business and be aware of potential risks.
- Illegally high interest rates or fees. Some lenders will charge more than $15 per $100 borrowed, which means you might end up paying much more for your loan that you would if you chose a legitimate lender.
- Identity theft. Online lenders might sell your personal information to third-parties, putting you at risk of identity theft or a hacked bank account.
- Funds taken from your bank account without your permission. Some online or unlicensed lenders have been known to resort to illegal ways to seek repayment from borrowers, including withdrawing money from their bank accounts or garnishing their wages.
Check that online lenders are licensed, to be sure they’re following BC laws and not charging excessive interest rates. Read the fine print to make an informed decision about your loan and watch out for red flags to avoid running into further financial difficulties along the way.
How to file a complaint against a lender
You can contact Consumer Protection BC at 1-888-564-9963 to discuss your options for filing a complaint. You can start a complaint by filling out an online form or by touching base with a customer service agent. The organization will typically conduct an investigation if they believe that a payday loans company has breached British Columbia’s consumer protection laws.
Short-term loan alternatives in British Columbia
Before taking out a payday loan, try the following alternatives. They can help solve your immediate money shortage, while keeping you out of long-term debt.
British Columbia assistance programs
British Columbia has a number of programs that can provide some much-needed relief to residents and newcomers who are struggling to make ends meet financially.
- BC Employment and Assistance Program helps people in financial need with monetary support and employment assistance.
- Affordable Housing Program offers a range of housing support programs, as well as affordable and subsidized housing for low-income families and seniors.
- Disability Assistance gives financial support to individuals who are designated as Persons with Disabilities (PWD) in the province.
Local financial institutions
Many credit unions and local banks have developed short-term loan programs to counteract payday loan lenders. These programs offer lower costs and processing fees to eligible candidates. Some institutions even offer credit builder programs which provide small loans that can help build your credit score and provide short-term financial relief with longer repayment terms.
If you’re struggling under the weight of unpaid bills, then you might like to consider a credit counselling program. These programs provide free debt and credit help. Credit Counselling Society of BC is one option that can help you with budgeting and consolidating your debts.
How can I apply for a payday loan?
If you’re interested in applying for a payday loan in British Columbia, you’ll need to meet the following eligibility criteria:
- Be at least 19 years old
- Provide proof of 3 months of continuous employment
- Give proof of address (e.g., they can ask to see a utility bill)
- Have an active chequing account
To complete your application successfully, prepare to submit some basic information:
- Personal details, such as your name, date of birth, Social Insurance Number and a valid form of ID
- Contact details, such as your residential address, email address and phone number
- Details about your employment and income
If you need to get your hands on emergency money, consider the risks and know your rights before you sign on for a payday loan. Familiarize yourself with payday loan regulations in British Columbia to make sure you’re aware of the maximum amount of fees you can be charged, as well as other lending rules. Be wary of unlicensed lenders and pay back your loan on time to avoid paying additional fees or interest.