Payday loans in the Northwest Territories

Payday loans are expensive loans that can be used as a quick fix for financial difficulties. While these loans can be a quick and easy solution to make ends meet, they should be avoided unless you’ve got no other financing options.

We’ve designed this guide to help you navigate the ins and outs of cash advance payday loans in the Northwest Territories, so that you have as much information as possible to make an informed decision before applying.

Can I get a payday loan in the Northwest Territories?

Yes, payday loans are legal in the Northwest Territories. While the provinces each have unique legislation surrounding payday loans, the three territories do not, and instead rely on federal laws. These federal laws regulate the maximum amount of money that can be issued by lenders in the Northwest Territories, as well as how much they can charge per $100 borrowed.

Here are the federal regulations surrounding payday loans in the Northwest Territories:

While you can legally be charged up to $60 in fees per $100 borrowed, keep in mind that some lenders will charge much lower fees (such as $25 in fees per $100 borrowed). This is why it’s important to shop around and compare different lenders in order to find the best loan for your needs.

How much does a payday loan in the Northwest Territories cost?

When it comes to payday loans, the Northwest Territories is governed by federal legislation – which allows lenders to charge up to $60 in fees for every $100 borrowed. The table below shows the fees on payday loans, compared to the typical costs of some common payday loan alternatives like a credit card cash advance and a line of credit.

Can I get a no credit check payday loan in the Northwest Territories?

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 to know before applying for a Northwest Territories payday loan?

Payday loans are a particularly risky form of debt in the Northwest Territories because they’re largely unregulated. Lenders can charge up to $60 in fees for every $100 borrowed, which is an excruciatingly high amount. Some payday lenders in the Northwest Territories may choose to charge less for a loan, such as $25 in fees per $100 borrowed, so make sure you shop around for the best rate before you apply for a payday loan.

How can I tell if a payday loan lender in the Northwest Territories is legit?

Lenders in the Northwest Territories have very few licensing requirements, which means they have very few legally-mandated obligations to protect customers. Look for the following signs to make sure you’re working with a reputable business.

• The lender follows federal payday loan legislation. Stay away from lenders who charge more than $60 in fees per $100 borrowed, and look for providers that offer competitive rates and fees in comparison to other payday lenders.
• They provide same-language contracts. The payday loan agreement should be written in clear, plain language that you understand. Ask the lender to explain sections of the agreement that you might not understand.
• Your contractual obligations are clear. Your payday loan agreement should list all charges, terms and conditions of the loan.
• The lender doesn’t request access to your bank account. You shouldn’t have to supply a direct deposit form or any other information that could give lenders access to your bank account.

How to file a complaint against a payday loan lender in the Northwest Territories

You can contact (867) 767-9161 to file a complaint. Unfortunately, it can be difficult to prosecute payday lenders who are operating illegally or unethically, since there are very few regulations in the Northwest Territories. That said, there’s no harm in reporting malpractice, particularly if the payday lender is charging more than $60 in fees per $100 borrowed.

Payday loan alternatives in the Northwest Territories

Before you sign on for a payday loan, it helps to explore all of the financing alternatives at your disposal.

Northwest Territories assistance programs

The Northwest Territories has a number of programs that can provide some much-needed relief for residents and newcomers who are struggling to make ends meet.

• Income Assistance Program provides a set amount for food, shelter and other incidentals like clothing, child care, furniture and educational assistance.
• Child benefit provides low-income families with monthly cash payments to assist with the costs of raising children.
• Senior Citizen Supplementary Benefit provides financial assistance to help Northwest Territories seniors pay for living costs.

Local financial institutions

Many credit unions and local banks are trying to counteract predatory payday loan lenders by creating low-interest, short-term loan programs to help customers with unexpected emergency expenses. Some institutions even offer credit builder programs which provide smaller loans that can help you build up your credit score so that you’re eligible for more affordable and competitive financial products.

Credit counselling

If you find yourself in a cycle of debt and want some free debt management and consolidation services, you might like to consider a credit counselling program, like those on offer by the Credit Counselling Society of the Northwest Territories.

Before you get a payday loan, consider alternatives available to you

How can I apply for a payday loan?

If you’re interested in applying for a payday loan in the Northwest Territories, 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

Bottom line

If you’re struggling to make ends meet and you need some help between paycheques, you should explore all of your financing options before settling on a payday loan. This can include asking family or friends for a short-term loan, borrowing through a line of credit from your local bank or taking out a cash advance using your credit card. If you don’t have other options, be sure to shop around to find the best deal and pay your loan off as soon as possible to avoid late payment fees and charges.

Have more questions about payday loans in the Northwest Territories?

• What is the maximum number of outstanding payday loans I can have in the Northwest Territories?

  You can take out multiple payday loans, at a maximum of $1,500 per loan.

• Do payday loan laws in the Northwest Territories permit roll-overs?

  Roll-over loans are allowed, which means you can roll what you owe on a payday loan into a second payday loan.

• Who can I contact if I have a complaint about my payday loan?

  You can file a complaint with the Northwest Territories Consumer Affairs at (867) 767-9161, who will act on your behalf to conduct an investigation into the payday loan business in question if they have done something illegal.

• Can I go to jail for not paying back an online payday loan?

  No, according to federal law in Canada, you can’t be arrested for unpaid debt. Plus, it’s illegal for a debt collector to threaten you with jail time. So if your lender attempts this, don’t feel threatened to comply. You may even be able to report the lender to Northwest Territories Consumer Affairs for illegal practices.

  To learn more about what can happen if you default on a payday loan, like whether or not a lender can sue you, read our full guide here.