Learn how to get a short-term loan in New Brunswick.
If you need of some fast cash to hold you over until your next paycheck, you might like to consider a payday loan. It isn’t the most affordable way to get your hands on emergency money, but it 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 New Brunswick, so that you have as much information as possible before you sign on the dotted line.
Can I get a payday loan in New Brunswick?
Yes. Short-term loans are legal in New Brunswick. The Cost of Credit Disclosure and Payday Loans Act 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 New Brunswick is $1,500 and the maximum term depends on the provider but usually ranges from 1 – 2 months.
Four quick facts about payday loans in New Brunswick
- Maximum loan amount: $1,500
- Minimum loan term: 2 weeks
- Maximum loan term: Around 1 – 2 months
- Maximum interest: $15 for every $100 that you borrow
What fees will I have to pay?
Although New Brunswick has laws in place to protect consumers from predatory lending, you’ll still need to pay a maximum of $15 for every $100 that you borrow. Payday lenders can’t give you a loan for more than 30% of your net pay cheque 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 $1000, 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||$15 per $100||$45||$345||391.07%|
You have two business days to cancel a contract for a payday loan without having to pay a fee. The comparison below shows the fees you will pay for a payday loan versus a credit card.
|Loan Amount (over 2 weeks)||Payday loan fee||Credit card fee (23%)|
Can I get a no credit check loan in New Brunswick?
You can get a no credit check with some lenders, but it’s not always the best option. Loans that don’t require a credit check often come with higher rates and fees. Instead, it makes more sense to allow your lender to do a soft credit check if you want to pay less. This only takes a couple of minutes and many short-term lenders won’t disqualify you based on a bad- or poor-credit rating.
What should I keep in mind before applying?
Make sure to shop around for the payday loan lender that offers the best terms for your loan. Borrow only as much as you’ll be able to repay and make sure to use a licensed lender to ensure the transaction is above board.
If you don’t think you can meet your repayment terms, you might like to think about short-term loan alternatives. For example, many credit unions have created short-term loans with low interest rates to help customers who need a little pick me up between paychecks.
How can I tell if a lender in New Brunswick is legit?
The best way to make sure a lender is legit is to check their credentials with the Financial and Consumer Services Commission. Look for the following signs to make sure you’re working with a reputable business.
- The lender displays a New Brunswick licence number. A licence is required to be displayed for each location where payday loans are offered to consumers in New Brunswick. Contact the Financial and Consumer Services Commission at 1-866-933-2222 to check the licence status of a payday lender.
- The lender displays fees. Payday loan lenders must have posters showing the rates they charge. Signs must be posted in both official languages and must be visible to borrowers.
- It doesn’t allow rollovers or multiple loans. New Brunswick law doesn’t allow payday lenders to give out multiple loans.
- It provides contracts in the language you use to speak with your lender. This means that if you and your lender communicate in English, your contract must be in English. If it’s French, your contract must also be in French.
- It follows rate and fee regulations. Stay away from lenders who charge more than $15 per $100 loan.
Watch out for unlicensed lenders
Online lenders can be a quick and easy way to get your hands on some fast cash, but they are often difficult to regulate and don’t have to comply with provincial licensing regulations. Unlicensed lenders can be problematic for a number of reasons.
- Illegally high interest rates or fees. It can be difficult to “read between the lines” on contracts, meaning you might end up paying much more than $15 per $100 of your loan.
- Identity theft. Lenders that operate online aren’t accountable to provincial governing bodies, which means they may misuse your personal information, including putting you at risk of identity theft or a hacked bank account.
- Funds taken from your bank account without your permission. Unlicensed lenders have been known to illegally withdraw money from customer’s bank accounts to help cover the cost of loan repayment.
Unlicensed lenders can operate out of New Brunswick or even outside of Canada, making it difficult for the province to prosecute them. That’s why it’s so important to make sure your lender is licensed to operate in New Brunswick before you borrow.
How to file a complaint against a lender
You can contact the Financial and Consumer Services Commission toll-free at 1-866-933-2222 to discuss your options for filing a complaint. The FCSC will conduct an investigation on your behalf if they believe that a payday loans business has breached New Brunswick’s consumer protection laws.
If the FCSC finds that your lender violated provincial law, it could take legal action against the business. This includes revoking its license, slapping it with a penalty and even filing a civil action to get a settlement for customers if the lender is facing numerous complaints.
Short-term loan alternatives in New Brunswick
Payday loans are one of the most expensive ways to access short-term loans. If you’ve had no luck asking family or friends for a helping hand, you might like to consider these other programs and lenders before you tap into a payday loan.
New Brunswick assistance programs
New Brunswick has some programs that can help lower the costs of everyday expenses for some residents and newcomers who are struggling to make ends meet.
- Social assistance program provides low-income individuals with financial assistance to cover expenses like food, clothing and rent.
- Affordable Housing program provides subsidized rental housing to low-income families, seniors and individuals who cannot afford other housing options.
- Disability support program helps people with disabilities who are in financial need pay for living expenses, like food and housing.
Local financial institutions
Some credit unions and local banks offer low-interest, short-term loans to help customers avoid taking out high-interest payday loans. These institutions may also offer credit builder programs, which provide loans in small amounts that can be paid back to help build your credit score.
If you’re swimming in debt or can’t seem to reign in your personal finances, you might like to look into a credit counseling program. These can help you make a budget and manage or consolidate your debts.
How can I apply for short-term loan?
If you’re interested in applying for a short-term loan in New Brunswick, 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’re considering taking out a payday loan, familiarize yourself with the laws of New Brunswick to make sure you’re getting the best terms for your loan. Keep in mind that payday loans are an expensive form of credit. Consider other ways to borrow money, be wary of unlicensed lenders and make sure to pay back your loan on time to avoid paying additional fees or interest.