Learn how to get a short-term loan in Prince Edward Island.
Payday loans are short-term loans used to cover unforeseen emergency expenses between paycheques. These loans aren’t the most affordable way to get your hands on fast cash, but can do the trick if you need a quick and easy solution to make ends meet.
We’ve designed this guide to help you navigate the ins and outs of cash advance payday loans in Prince Edward Island, so that you have as much information as possible before you sign on the dotted line.
Can I get a payday loan in Prince Edward Island?
Yes. Short-term loans are legal in Prince Edward Island. The Payday Loans Act helps protect people who take out payday loans.
Each province has its own rules that govern pricing. The most money you can borrow in a payday loan in Prince Edward Island is $1,500 and the maximum term for this type of loan is 62 days.
Four quick facts about payday loans in Prince Edward Island
- Maximum loan amount: $1,500
- Minimum loan term: 1 – 2 weeks
- Maximum loan term: 62 days
- Maximum interest: $25 for every $100 that you borrow
What fees will I have to pay?
The Payday Loans Act allows lenders in Prince Edward Island to charge up to $25 for every $100 borrowed, which is one of the highest rates in Canada. If you default on a payment, the lender can also charge you a $40 late fee.
You have two business days to cancel a contract for a payday loan without having to pay a fee. The table below shows the rates on a 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 Prince Edward Island?
Online and predatory lenders are notorious for offering no credit check loans, which often come with higher fees and interest rates. They are designed to target vulnerable borrowers who have a bad- or poor- credit rating. A better solution is to find a lender willing to do a soft credit check, which won’t affect your credit rating. You will often qualify for a short-term cash advance, even if your credit rating isn’t up to snuff.
What should I keep in mind before applying?
Payday loans are the most expensive type of loan you can take out, with high interest rates and short-term repayment conditions. The only time you should take out a payday loan is when you know you can repay the amount in full by the required date. It’s important to compare providers to find the best terms for your loan and use a licensed lender. If you don’t think you can meet repayment terms, you should think about short-term loan alternatives.
How can I tell if a lender in Prince Edward Island is legit?
The best way to make sure a lender is legit is to check their credentials with Consumer, Labour and Financial Services at 1-800-658-1799. Look for the following signs to make sure you’re working with a reputable business.
- The lender displays a Prince Edward Island licence number. Lenders must possess a valid license issued by the province of Prince Edward Island in order to operate.
- The lender displays fees. The costs associated with loans must be displayed in a visible location on the lender’s premises as well as online.
- It doesn’t allow rollovers or multiple loans. Borrowers must pay their first loan in full before they are eligible to take out a second loan.
- It provides contracts in clear and understandable language. All lenders must provide the exact details of loan costs, payment terms, total fees and interest rates in a contract written in a language that the borrower speaks fluently.
- It follows consumer protection laws. Fees should not exceed the allowable amount of $25 per $100.
Watch out for unlicensed lenders
It’s not uncommon to run into an unlicensed lender when you take out a payday loan (particularly if you do so online). If you’re thinking about taking out a payday loan in PEI, make sure that you’re dealing with a licensed business and be aware of potential risks:
- Illegally high interest rates or fees. If a lender is attempting to charge rates above the $25 per $100 rate, you can rest assured that they aren’t operating above board.
- Identity theft. Unlicensed lenders don’t follow regulations imposed by the province. This can be particularly problematic when it comes to the security of your personal and banking information, putting customers at risk of identity theft or a hacked bank account.
- Funds taken from your bank account without your permission. Some online or unlicensed lenders have been known to resort to illegal ways to seek repayment from borrowers, including withdrawing money from their bank accounts or garnishing their wages.
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, Labour and Financial Services at 1-800-658-1799 to discuss your options for filing a complaint. The organization will typically conduct an investigation if they believe that a payday loans company has breached Prince Edward Island’s payday loan regulations.
Short-term loan alternatives in Prince Edward Island
Before you take out a high-interest cash advance, look into available alternatives. They can help solve your short-term money needs while keeping you out of long-term debt.
Prince Edward Island assistance programs
Prince Edward Island has a number of programs that can provide some much-needed relief for residents and newcomers who are struggling to make ends meet.
- PEI Social Assistance helps people in financial need with support for food, shelter, medications, basic dental, glasses and other incidentals.
- Family or Seniors housing program offers a range of housing support programs, as well as affordable and subsidized housing for low-income families and seniors.
- AccessAbility Supports helps individuals living with disabilities to cover the cost of basic living expenses, housing and searching for employment.
Local financial institutions
There are many financial institutions – like Credit Unions and local banks – that are cropping up in the short-term loan space. These institutions typically offer much more competitive interest rates on loans. In some cases, they also offer credit builder programs which provide smaller loans that can help build your credit score.
If you’re struggling under the weight of unpaid bills then you might like to consider registering with a credit counselling program, which provides free debt and credit help. Credit Counselling with Family Service PEI is one option that can help you with budgeting and consolidating your debts.
How can I apply for short-term loan?
If you’re interested in applying for a short-term loan in Prince Edward Island, 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 short-term loan, consider other options before heading to your nearest payday lender. If you think that this type of loan is the best option for you, make sure to shop around to find the best deal on rates and fees. Be wary of unlicensed lenders and pay back your loan on time to avoid paying additional fees or interest.