Payday loans in Nunavut
Learn how to get a short-term loan in Nunavut.
Payday loans are short-term loans that can help tide you over between paycheques. These loans should only be used as a quick fix rather than a long-term solution for financial difficulties. While payday loans can do the trick if you need a quick and easy solution to make ends meet, they’re also one of the most expensive forms of debt and should be avoided where other short-term alternatives exist.
We’ve designed this guide to help you navigate the ins and outs of cash advance payday loans in Nunavut, so that you have as much information as possible before you sign on the dotted line.
Can I get a payday loan in Nunavut?
Yes. Short-term loans are legal in Nunavut. Federal laws regulate the maximum amount of money that can be issued by lenders ($1,500) and the max length of the term (62 days).
Nunavut is one of the only Canadian provinces that hasn’t capped their maximum interest rate at 25% or $25 per $100 borrowed. The interest rate in Nunavut currently remains at $60 per $100 borrowed.
Four quick facts about payday loans in Nunavut
- 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?
Nunavut allows lenders to charge up to $60 for every $100 borrowed, which is the highest rate in Canada (and the max rate allowed by federal law). There are no provincial regulations governing the issuance of payday loans.
If your payday loan isn’t paid on time, you’ll likely be on the hook for additional fees and your loan will accumulate interest, making your financial situation worse. The table below shows the fees on a $300 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 Nunavut?
Many lenders operating in Nunavut offer no credit checks for those who have bad- or poor-credit rating. Just be aware that no credit checks loans can come with higher fees and are typically offered by predatory 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 largely unregulated in Nunavut, which makes them a risky form of debt. Lenders can charge up to 60% of the amount borrowed which can end up costing you hundreds of dollars in fees and interest rates for a relatively small loan.
Look into your short-term loan alternatives before you resort to a payday loan. Avoid taking out additional loans to pay off existing loans and compare providers to find the best terms and the cheapest rates.
How can I tell if a lender in Nunavut is legit?
Since there is no legislation governing payday loans in Nunavut, it’s easy for predatory lenders to take advantage of consumers. Look for the following signs to make sure you’re working with a reputable business.
- The lender complies with federal payday loans legislation. Stay away from lenders who charge more than $60 per $100 loan.
- They don’t allow rollovers or multiple loans. Nunavut is one of the only provinces where “rolling over” your loan is still legal, but try to avoid lenders that allow rollovers since it’s a predatory practice which has been outlawed in most other provinces.
- They provide same-language contracts. Your lender should only provide contracts in a language you speak fluently.
- Your contractual obligations are clear. Your contract clearly outlines how much your loan will cost you in payments, fees and interest by the end of your term.
- The lender doesn’t request access to your bank account. You don’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
The internet has made it easier than ever to get access to payday loans. Some lenders may be across the country or even across the world. If you’re thinking about taking out an online payday loan in Nunavut, make sure that you’re aware of the potential risks:
- Illegally high interest rates or fees. Some lenders will offer rates above $60 per $100 of your loan, which means you might end up paying much more for your loan that you would otherwise.
- Identity theft. Online lenders might sell your personal information to third-parties, putting you at risk of identity theft or a hacked bank account.
- Funds taken from your bank account without your permission. Some lenders take money from bank accounts illegally, which can lead to future financial difficulties.
Since Nunavut doesn’t impose the same payday loan regulations as other provinces, there are more risks associated with borrowing short-term loans both online and in-person. Make sure to read the fine print on payday loan contracts and look for short-term loan alternatives wherever possible.
How to file a complaint against a lender
You can contact Consumer Affairs at (866) 223-8139 to discuss your options for filing a complaint. Since payday lenders aren’t regulated in Nunavut, there’s very little the government can do to protect consumers. That being said, there’s no harm in reporting malpractice, particularly if the payday lender is charging more than $60 per $100 on your loan.
Short-term loan alternatives in Nunavut
Before taking out a payday loan, try the following alternatives. They can help solve your short term money needs while keeping you out of long-term debt.
Nunavut assistance programs
Nunavut has a number of programs that can provide some much-needed relief for residents and newcomers who are struggling to make ends meet.
- Nunavut Income Assistance Program helps people in financial need with support to meet their basic needs, like clothing, food and accommodation.
- Daycare subsidy offers support to families struggling to cover the cost of childcare.
- Nunavut Housing Corporation gives financial support to seniors and disabled persons who need access to affordable housing.
Local financial institutions
Many credit unions and local banks have created low-interest, short-term loan programs to help customers with unforeseen emergency expenses. Some institutions even offer credit builder programs which provide smaller loans that can help build your credit score.
If you’re unable to pay your bills on time and are struggling to make ends meet between paycheques, then you might like to consider a credit counseling program for free debt and credit help.
How can I apply for short-term loan?
If you’re interested in applying for a short-term loan in Nunavut, 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 pick-me-up between paycheques, you should consider other alternatives before you settle on a high-interest payday loan. If you don’t have other options, make 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.