Learn how to get a short-term loan in Manitoba.
Payday loans are short-term high interest loans that are designed to help you through unexpected financial difficulties. These loans are a quick and easy way to cover your expenses between paycheques, but are also one of the most expensive forms of debt.
We’ve designed this guide to help you navigate the ins and outs of cash advance payday loans in Manitoba, so that you have as much information as possible before you sign on the dotted line.
Can I get a payday loan in Manitoba?
Yes. Short-term loans are legal in Manitoba. The Consumer Protection Act and the Payday Loans Regulation help 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 Manitoba is $1,500 and the maximum term for this type of loan is 62 days.
Four quick facts about payday loans in Manitoba
- Maximum loan amount: $1,500
- Minimum loan term: 1 – 2 weeks
- Maximum loan term: 62 days
- Maximum interest: $17 for every $100 that you borrow
What fees will I have to pay?
The most you can be charged for a payday loan in Manitoba is 17% of the principal amount of the loan (or $17 per $100 borrowed). Payday lenders can’t give you a loan for more than 30% of your net paycheque.
Example: If your previous net pay is determined to be $1,000, the most you can borrow is $300. 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||$300||$17 per $100||$51||$351||517%|
The table below shows the fees on a 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 Manitoba?
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 an expensive form of debt that should be avoided where possible. The only time you should take out a payday loan is when you know you can repay the amount in full by the required date. You should also be sure that the lender you use is licensed in the province. If you don’t think you can meet repayment terms, you should think about short-term loan alternatives.
How can I tell if a lender in Manitoba is legit?
The best way to make sure a lender is legit is to check their credentials with the Consumer Protection Office. Look for the following signs to make sure you’re working with a reputable business.
- The lender displays a Manitoba licence number. Lenders should display their license numbers at all times. You can also contact the Consumer Protection Office at 1-800-782-0067 to check if a lender is licensed in the province.
- The lender displays fees. Payday loan lenders must display posters showing the rates they charge.
- It doesn’t allow rollovers or multiple loans. Manitoba law doesn’t allow payday lenders to give out multiple loans or to allow you to use one loan to pay off another.
- 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 $17 per $100 loan. If you’re charged more than the maximum rate allowed, you have the right to be reimbursed the entire amount of the fee charged.
Watch out for unlicensed lenders
Canadians who take out payday loans online are more likely to encounter unlicensed lenders than those who visit an agent location. If you’re thinking about taking out an online payday loan in Manitoba, be aware of the potential risks and make sure to read the fine print before you borrow:
- Illegally high interest rates or fees. Online lenders often charge higher interest rates than the $17 per $100 allowed by Manitoba law.
- Identity theft. Be careful about handing your personal information over to online lenders, as some have been prosecuted for selling clients’ personal information to third parties, putting them at risk of identity theft or a hacked bank account.
- Funds taken from your bank account without your permission. Never provide your banking passwords or other information to online vendors as they have been known to withdraw money from bank accounts illegally.
The best way to protect yourself online is to make sure that the lender you aim to use is licensed in Manitoba. 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 Manitoba’s Consumer Protection Office at 1-800-782-0067 to discuss your options for filing a complaint. They will pursue an investigation to find out if the payroll lender in question has breached provincial consumer protection laws.
Short-term loan alternatives in Manitoba
There are alternatives to using payday lenders that may cost you less. These include social assistance programs, borrowing from credit unions or accessing credit counselling. Find out more about the services on offer in Manitoba.
Manitoba assistance programs
Manitoba has a number of programs that can provide some much-needed relief for residents and newcomers who are struggling to make ends meet.
- Manitoba Employment and Income Assistance Program helps people in financial need with monetary support and employment assistance.
- Rent Assist is a financial benefit for eligible low-income private renters who are spending a large amount of their monthly income on their rent.
- The 55 PLUS Program provides quarterly benefits to lower-income Manitobans who are 55 years of age and over.
- The Manitoba Child Benefit (MCB) allows low-income parents not receiving EIA to access benefits to support the cost of raising their children.
- Income support for persons with disabilities gives financial support to individuals who are struggling with long-term mental or physical disability.
Local financial institutions
There are a handful of credit unions and local banks that might be willing to provide short-term loans at much lower interest rates than payday lenders. Some institutions even offer credit builder programs which provide smaller loans that can help build your credit score.
If you feel like you’re drowning in debt and you’re not making any headway on paying your bills down, it might be time to look into a credit counselling program. The Credit Counselling Society of Manitoba 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 Manitoba, you’ll need to meet the following eligibility criteria:
- Be at least 18 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 find yourself in need of a short-term loan, consider other options before heading to your nearest payday lender. Be aware that these lenders are typically much more expensive than other options, like taking out a line of credit or cash advance on your credit card. If you still want to use a payday loan provider, make sure 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.