Learn how to get a short-term loan in British Columbia.
Payday loans are short-term loans that are meant to cover unforeseen emergency expenses between paycheques. These loans aren’t the most affordable way to get your hands on emergency money, but can do the trick if you need a quick and easy 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 before you sign on the dotted line.
Can I get a payday loan in British Columbia?
Yes. Short-term loans are legal in British Columbia. The Consumer Financial Protection Action Plan helps protect people who take out payday loans.
Each province has its own rules that govern pricing. The most money you can borrow in a payday loan in British Columbia is $1,500 and the maximum term for this type of loan is 62 days.
Cash Money Payday Loan
- Minimum loan amount: $50
- Maximum loan amount: $1,500
- Loan term: 12-14 days. Vary by province
- Turnaround time: Within 2 hours with INTERAC e-Transfer® if approved
- Key requirements: Be 18+ years old, provide proof of recurring income
Four quick facts about payday loans in British Columbia
- Maximum loan amount: $1,500
- Minimum loan term: 1 – 2 weeks
- Maximum loan term: 62 days
- Maximum interest: $15 for every $100 that you borrow
Compare payday loans in British Columbia
Check the websites of any providers 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, which is the lowest rate in Canada. Payday lenders can’t give you a loan for more than 50% of your net paycheque and the loan agreement must list all of the charges, terms and conditions of the loan.
Example: If your previous net pay is determined to be $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.
|Net Pay||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 on a $300 payday loan, compared to the typical costs of some other types of loans for the same amount.
|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?
Some lenders offer no credit checks, which can be tempting if you have a bad- or poor-credit rating. Just be aware that no credit checks loans can come with higher fees and are typically offered by unlicensed lenders. A better solution is to find a lender willing to do a soft credit check, which won’t affect your credit rating.
What should I keep in mind before applying?
Payday loans are the most expensive type of loan you can take out, with high interest rates and short-term repayment conditions. It’s important to compare providers to find the best terms for your loan. If you don’t think you can meet your repayment terms, it might make sense to think about short-term loan alternatives. If you decide to go with a payday loan provider, make sure they’re licensed to avoid complications.
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 fees. Payday loan lenders must display posters showing the rates they charge.
- It doesn’t allow rollovers 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 loan.
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. 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 offer rates above $15 per $100 of your loan, which means you might end up paying much more for your loan that you would otherwise.
- 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 short term money needs 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 for residents and newcomers who are struggling to make ends meet.
- 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 interest rates and processing fees to eligible candidates. Some institutions even offer credit builder programs which provide smaller loans that can help build your credit score.
If you’re struggling under the weight of unpaid bills then you might like to consider a credit counseling program, which 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 short-term loan?
If you’re interested in applying for a short-term loan in British Columbia, you’ll need to meet the following eligibility criteria:
- Be at least 19 years old
- Prove 3 months of continuous employment
- Give proof of address (e.g., they can ask to see a utility bill)
- Have a 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 for a payday loan. If you think that this type of loan is the best option for you, make sure to shop around to find the best deal on rates and fees. Be wary of unlicensed lenders and pay back your loan on time to avoid paying additional fees or interest.