Payday loans in New Brunswick
You'll pay a maximum of $15 in fees for every $100 you borrow.
Looking to get your hands on some fast cash to tide you over until your next paycheque? You might think about taking out a payday loan. But while they’re convenient and easy to get, payday loans are expensive and risky, often throwing borrowers into a cycle of debt.
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 to make an informed decision before you sign on the dotted line.
Can I get a payday loan in New Brunswick?
Yes, payday loans are legal in New Brunswick. Each province has it’s own regulations surrounding payday loans, and in New Brunswick, the Cost of Credit Disclosure and Payday Loans Act help protect those who take out payday loans.
Here are the rules surrounding payday loans in New Brunswick:
- 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 loan by the due date.
- The maximum amount you can borrow is $1,500.
- You can’t borrow more than 30% of your net income.
- Loans usually must be paid off within 2 – 4 weeks.
- The maximum term for this type of loan is 62 days.
- You can’t get a new loan until you pay off your first one.
- Lenders cannot ask you to sign a form that transfers your wages directly to them.
- Roll-over loans are not allowed. This means you can’t roll over what you owe into a second payday loan.
- Should you change your mind and want to cancel your payday loan, you have 48 hours (excluding Sundays and holidays) to do so without facing a penalty. You also don’t have to provide a reason for cancelling.
⚠️ 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.
Four quick facts about payday loans in New Brunswick
- 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
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 in fees for every $100 that you borrow. Payday lenders can’t give you a loan for more than 30% 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 $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 typical 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?
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?
If you’re struggling to make it between paycheques, a short-term loan has the potential to help you through your financial troubles. But keep in mind payday loans can be the most expensive solution for your short-term financial problems. You could save big if you think about other ways to solve your money issues.
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 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. 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 roll-overs or multiple loans. New Brunswick law doesn’t allow payday lenders to give out multiple loans or to allow borrowers to use a second payday loan to pay off their current one.
- 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 in fees per $100 borrowed.
Watch out for unlicensed lenders
Online lenders can be a quick and easy way to get your hands on some fast cash, but they’re often difficult to regulate and don’t have to comply with provincial licensing regulations. Unlicensed online lenders can be problematic for a number of reasons. Watch out for the following:
- 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 in fees per $100 borrowed.
- 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 sign a contract and borrow money.
How to file a complaint against a lender
You can contact the Financial and Consumer Services Commission (FCSC) 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 loan 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.
Payday 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 settle for 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 less expensive small-dollar financing amounts with longer repayment terms. You could also look into credit builder loans, which come in small amounts and can help you improve your credit score by reporting every on-time repayment you make to credit bureaus. You also typically have more time to pay it off.
If you’re swimming in debt or can’t seem to reign in your personal finances, you might like to look into a credit counselling program. These can help you make a budget and manage or consolidate your debts.
How can I apply for a payday loan?
If you’re interested in applying for a payday loan in New Brunswick, you’ll need to meet the following eligibility criteria:
- Be at least 19 years old
- Provide proof of 3 months of continuous employment
- Show 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’re considering taking out a payday loan, familiarize yourself with the laws of New Brunswick to make sure you’re aware of the maximum amount of fees you can be charged, as well as other lending rules. As with all forms of credit, be prepared to pay for both the principal and the fees. Should you have other financing options, turn to those before settling for an expensive payday loan.