Payday loans in Nunavut
You'll pay a maximum of $60 in fees for every $100 you borrow.
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 when possible.
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, payday loans are legal in Nunavut. 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 Nunavut, as well as how much they can charge per $100 borrowed.
Here are the federal regulations surrounding payday loans in Nunavut:
- 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 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 is governed by federal payday loan 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 Nunavut?
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 largely unregulated in Nunavut, which makes them a risky form of debt. Lenders can charge up to $60 per $100 borrowed, which can end up costing you hundreds of dollars in fees for a relatively small loan. There are also very few rules in place to prevent predatory lending practices like roll-overs (which allow borrowers to use a second payday loan to pay off their current payday loan). Some payday lenders in Nunavut may choose to charge less for a payday 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.
Before applying for a payday loan, remember that there are other short-term financing alternatives that are usually much more affordable. Options include using a personal loan, credit card, line of credit or borrowing money from friends and family.
How can I tell if a lender in Nunavut is legit?
Since there is no territorial 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 loan legislation. Stay away from lenders who charge more than $60 in fees per $100 borrowed.
- 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 fees and interest by the end of your term.
- 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
The Internet has made it easier than ever to get access to payday loans – but some online 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 charge fees higher than $60 per $100 borrowed, 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 payday loans in Nunavut are regulated at the federal level, 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 financing 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 in fees per $100 borrowed.
Payday 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 you build up your credit score so you’ll be eligible for better products like personal loans.
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 counselling program for free debt and credit help.
How can I apply for a payday loan?
If you’re interested in applying for a payday loan in Nunavut, you’ll need to meet the following eligibility criteria:
- Be at least 18 years old
- Provide proof of 3 months of continuous employment
- Give 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 find yourself in need of some fast cash between paycheques, you should consider other alternatives before you settle on a high-interest payday loan. If you don’t have other options, shop around to find the best payday loan deal and pay your loan back on time and in full in order to avoid additional charges and rates.