Payday loans in the Northwest Territories
You'll pay a maximum of $60 in fees for every $100 you borrow.
Payday loans are expensive short-term 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:
- Lenders can charge up to $60 in fees per $100 borrowed.
- A lender can charge additional fees if you don’t pay your loan by the due date.
- You can borrow up to $1,500 with a payday loan.
- The maximum length of term is 62 days.
- Roll-overs are allowed, which means you can use a second payday loan to pay off your current one.
While you can legally be charged up to $60 in fees per $100 borrowed, it’s important to note 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.
⚠️ 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.
Fast facts about payday loans in the Northwest Territories
- Maximum loan amount: $1,500
- Minimum loan term: 1 – 2 weeks
- Maximum loan term: 62 days
- Maximum interest: $60 for every $100 that you borrow
What fees will I have to pay?
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 alternatives.
|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 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 should I keep in mind before applying?
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 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.
Watch out for online lenders
Predatory payday lenders are well-known for operating in poorly regulated provinces and territories. If you’re thinking about taking out an online payday loan in the Northwest Territories, make sure that you’re aware of the potential risks. Watch out for:
- Illegally high interest rates or fees. If a lender is attempting to charge rates higher than $60 per $100 borrowed, you can rest assured that they aren’t operating legally.
- Identity theft. There have been many reports of online lenders selling customer’s personal information to third-parties, leading to identity theft and hacked bank accounts.
- Funds taken from your bank account without your permission. Some lenders take money from bank accounts illegally by using a direct deposit form.
Since the Northwest Territories doesn’t have the same payday loan regulations as other parts of the country, there are more risks associated with borrowing short-term loans both online and in-person. Before applying, look for alternative forms of financing.
How to file a complaint against a lender
You can contact Consumer Affairs at (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 short-term 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.
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.
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
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.