Payday loan regulations in Canada
Learn whether there are regulations that apply to payday loans in your province or territory.
Regulations for payday loans vary between provinces and territories. The rules in your specific location have a huge effect on what lenders can charge. As a borrower, it’s important for you to be aware of these regulations and to make sure your loan has the right terms and fees dictated by the government. Read on to learn about the differences.
⚠️ 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 the Credit Counselling Canada on 1800 007 007. It is open from 8:00am to 5pm, Monday to Friday. When comparing short term loans, ensure you take into consideration any fees, charges and rates you may be charged.
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
- APR: Varies by Province
- 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
- Simple application process
- Fast turnaround time
- Extended business hours
Find Payday Loans in your province
Check the websites of any lenders you’re interested in to confirm they operate in your province of residence.
Are payday loans available in your province?
Payday loans are available in all provinces and territories across Canada. You should be aware that payday loans are regulated by individual provinces, meaning costs and fees can vary between. Ensure that any lender you choose abides by the laws of the place you live.
The Yukon, Nunavut and the Northwest Territories do not have territorial legislation regulating payday loans, and are instead overseen by the federal government.
Payday loan legislation in Canada
While all 10 provinces have legislation, the three territories – Yukon, Northwest Territories and Nunavut – are still patiently waiting.
| Province | Maximum | Additional Information |
|---|---|---|
| British Columbia | $15 per $100 | Term of loan cannot exceed 62 days. Only one loan per borrower at a time is allowed. Cooling off period of two business days. Borrowing limit of 50% of recipient’s paycheque. Lender is restricted from accessing the borrower’s bank account or wages. Payday loans cannot be rolled over or extended. |
| Alberta | $15 per $100 | Term of loan cannot exceed 62 days. Cooling off period of two business days. Lender is restricted from accessing the borrower’s bank account or wages. Payday loans cannot be rolled over or extended. |
| Saskatchewan | $17 per $100 | Term of loan cannot exceed 62 days. Cooling off period of next business day. Borrowing limit of 50% of recipient’s paycheque. Lender is restricted from accessing the borrower’s bank account or wages. Payday loans cannot be rolled over or extended. |
| Manitoba | $17 per $100 | Term of loan cannot exceed 62 days. Cooling off period of 48 hours, excluding Sundays and holidays. Borrowing limit of 30% of recipient’s paycheque. Lender is restricted from accessing the borrower’s bank account or wages. Loans can be extended or rolled over. |
| Ontario | $15 per $100 | Borrowing limit of 50% of recipient’s net income. Cooling off period of two business days. Lender is restricted from accessing the borrower’s bank account or wages. Payday loans cannot be rolled over or extended. Lender must offer ‘Extended payment plan’ if borrower takes out three loans within a 63 day period. |
| Quebec | Limit of 35% annual interest rate (AIR) | Term of loan cannot exceed 62 days. Payday loans cannot be rolled over or extended. |
| Newfoundland and Labrador | $21 per $100 | Term of loan cannot exceed 62 days. Cooling off period of two business days. |
| New Brunswick | $15 per $100 | Lender is restricted from accessing the borrower’s bank account or wages. Cooling off period of 48 hours, excluding Sundays and holidays. Payday loans cannot be rolled over or extended. The loan amount is limited to 30% of the recipient’s net pay. |
| Nova Scotia | $19 per $100 | Term of loan cannot exceed 62 days. Cooling off period of next business day. Lender is restricted from accessing the borrower’s bank account or wages. Payday loans cannot be rolled over or extended. |
| Prince Edward Island | $25 per $100 | Term of loan cannot exceed 62 days. Cooling off period of two business days. |
What are lenders allowed to charge you?
The Annual Percentage Rate, or APR, is one of the main costs you will need to consider with a payday loan. In most provinces that regulate payday loans, you’ll find that the APR is restricted. Otherwise, a lender may be able to charge as much as it wants, which can be the case in the three territories where there is no territorial legislation. Make sure you know the total cost of a loan before you borrow the money.
Some provinces have other restrictions on the percentage lenders may charge based on how much you borrow or in the total amount you can be charged or borrow in a year. These regulations usually only apply to interest rates, meaning a lender can charge fees on top of the interest rate or for refinancing your loan.
Learn the ins and outs of payday lending
How much you can borrow and how long you have to repay
Some provinces impose limits on loan amounts and terms. These limits are generally affected by how much money you bring home a month from your job, with maximum limits sitting between 30-50% of your monthly salary in some provinces.
Payday loans are meant to last until your next payday. This means that a typical loan term will be two to four weeks, and the length of your loan has a huge impact on the amount of interest you’ll end up paying. Make sure the amount you’re borrowing and the payment plan aligns with your budget as well as the local provincial regulations.
