Payday loans are loans used to cover unforeseen emergency expenses between paycheques. While these loans are far from the most affordable way to get your hands on fast cash, they are easy to get and convenient. But before you apply, you’ll want to consider alternative forms of financing.
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.
⚠️ Warning: Be cautious with payday loansHigh-cost payday loans are unsustainable for borrowing over a continued period of time and are expensive as a means of longer-term borrowing. View payday costs and regulations by province here. If you're experiencing financial hardship call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). You may also want to consider payday loan alternatives.
Compare payday loans in PEI
|Payday lender||Loan details||Can I apply online?||Turnaround time|
|As little as 2 minutes with INTERAC e-Transfer®|
|As little as 2 minutes with INTERAC e-Transfer®|
|30 minutes to get approved during business hours, and another 30 minutes to get an e-mail transfer once approved|
Maximum borrowing costs of payday loans per provinceAlways refer to your contract for exact repayment amounts and costs.
|Province||Max. cost of borrowing a $100 payday loan||Cooling off period to cancel loan||Max. penalty for returned cheque or pre-authorized debit|
|Alberta||$15||2 business days||$25|
|British Columbia||$15||2 business days||$20|
|Manitoba||$17||48 hours excluding Sundays and holidays||$20|
|New Brunswick||$15||48 hours excluding Sundays and holidays||$20|
|Newfoundland and Labrador||$14||2 business days||$20|
|Nova Scotia||$17||Next business day (2 days for online loans)||$40 (default penalty)|
|Ontario||$15||2 business days||$25|
|Prince Edward Island||$15||2 business days||N/A|
|Quebec||Limit of 35% AIR||N/A||N/A|
|Saskatchewan||$17||Next business day||$25|
Can I get a payday loan in Prince Edward Island?
Yes, payday loans are legal in Prince Edward Island. Each province has its own rules that govern costs and lending restrictions. In PEI, the Payday Loans Act helps protect those who take out payday loans.
Here are the rules surrounding payday loans in Prince Edward Island:
- You can’t be charged more than $15 in fees for every $100 borrowed.
- A lender can charge additional fees if you don’t pay your loan by the due date.
- The maximum amount you can borrow is $1,500.
- Loans usually must be paid off within 1 – 2 weeks.
- The maximum loan term is 62 days.
- You can’t get a new loan until you pay off your first one.
- Roll-over loans are not allowed. This means you can’t roll over what you owe into a second payday loan.
- You can change your mind for whatever reason and cancel your payday loan within 2 days without facing a penalty.
How much do payday loans in PEI cost?
The Payday Loans Act allows lenders in Prince Edward Island to charge up to $15 for every $100 borrowed. If you default on a payment, the lender can also charge you a fee. You have 2 business days to cancel a contract for a payday loan without having to pay a fee – also known as a “cooling-off period”.
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?
Some PEI payday lenders won’t do a credit check when issuing a payday loan, but still many do. Lenders who don’t do credit checks will be more interested in you having:
- An active chequing account
- A permanent address (and proof of it)
- 3 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 keep in mind before applying for payday loans in PEI?
If you have your heart set on getting a payday loan in PEI, it’s important to shop around for the best deal. That being said, it’s also a good idea to think about other loan alternatives since payday loans are usually the most expensive solution for your short-term financial problems. You could save big if you think about other ways to solve your money issues.
If you do decide to take out a payday loan, it’s important to borrow only as much as you’ll be able to repay and to budget your repayments accordingly. If you default on your loan or the loan goes into collections, you’ll receive a negative mark on your credit report that can stay there for up to 6 years. Make sure to budget for the amount of money you plan to take out, and use a licensed lender.
How can I tell if a payday lender in PEI is legit?
The best way to make sure a payday lender in PEI 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 payday loans in PEI must be displayed in a visible location on the lender’s premises as well as online.
- It doesn’t allow roll-overs 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 $15 per $100 borrowed.
How can I apply for a payday loan in PEI?
If you’re interested in applying for payday loans in PEI, you’ll need to meet the following eligibility criteria:
- Be at least 18 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
Watch out for unlicensed payday lenders in PEI
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. Watch out for:
- Illegally high interest rates or fees. If a lender is attempting to charge fees higher than $15 per $100 borrowed, you can rest assured that they’re operating illegally.
- 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 payday loans in PEI both online and in-person. Make sure to read the fine print on payday loan contracts and look for loan alternatives wherever possible.
How to file a complaint against a payday lender in PEI
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 loan company has breached Prince Edward Island’s payday loan regulations.
Payday loan alternatives in Prince Edward Island
Before you take out a high-interest payday loan in PEI, 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 costs 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 and longer repayment terms compared to payday loans in PEI. In some cases, they also offer credit builder programs which provide smaller loans that can help build your credit score, allowing you to be eligible for more competitive financing products like personal loans.
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.
If you find yourself in need of a loan, consider other options before opting for payday loans in PEI. If you think that this type of loan is the best option for you, shop around to find the best deal on rates and fees. Be wary of unlicensed lenders and pay back your loan on time and in full to avoid paying additional fees or interest. Learn more with our guide to payday loans here.
Frequently asked questions about payday loans in PEI
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