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Payday loans in Toronto
You'll pay a maximum of $15 in fees for every $100 you borrow.
If you need to get your hands on some fast cash in Toronto, you might consider taking out a payday loan. These loans are high-interest, short-term cash advances meant to tide you over until your next paycheque. But while they’re convenient and easy to get, payday loans are expensive and risky.
We’ve designed this guide to help you navigate the ins and outs of payday loans, so that you have as much information as possible to make an informed decision before applying for one.
Can I get a payday loan in Toronto?
Yes, payday loans are legal in Toronto. In each province, unique legislation is in place to protect borrowers. The Payday Loans Act, 2018 helps protect those who take out payday loans in the province of Ontario.
Here are the rules surrounding payday loans in Toronto (and the rest of Ontario):
- 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.
- You can’t borrow more than 50% of your net income.
- Loans usually must be paid off within 5 – 40 days.
- You can’t get a new loan until you pay off your first one.
- Lenders cannot ask you to sign a form that transfers your wages directly to them.
- Roll-over loans are not allowed. This means you can’t roll over what you owe into a second payday loan.
- Should you change your mind and want to cancel your payday loan, you have two days to do so without facing a penalty. You also don’t have to provide a reason for cancelling.
- Lenders must offer you an extended payment plan if you take out three loans within a 63-day period.
- Lenders cannot offer or sell you any products or services in connection with the payday loan.
⚠️ Warning: Be cautious with payday loansPayday loans are expensive. 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). Consider alternatives instead of a payday loan:
- Local resources. Government programs and nonprofits offer free financial services and help with food, utilities and rent.
- Debt relief companies. There are services to help you reduce your debt payments.
- Payment extensions. Talk with bill providers about longer payment plans or due-date extensions.
- Side jobs. Sell unwanted items online, sign up for food delivery and more.
GoDay Payday Loan
- Loan amount: $100 - $1,500
- Loan term: Up to 62 days
- Borrowing costs: Varies by Province (Between $15-$19 per $100 borrowed)
- Bad credit borrowers: OK
Fast facts about payday loans in Toronto
- Maximum loan amount: $1,500
- Loan term: Usually 5 – 40 days
- Maximum cost: $15 for every $100 borrowed
Compare payday loans in Toronto
Check the websites of any lenders you’re interested in to confirm they operate in your province or territory of residence.
Maximum borrowing costs per provinceAlways refer to your contract for exact repayment amounts and costs as they may vary from our results.
|Province||Maximum allowable cost of borrowing|
|Alberta, British Columbia, New Brunswick, Ontario & Prince Edward Island||$15 per $100 borrowed|
|Manitoba & Saskatchewan||$17 per $100 borrowed|
|Newfoundland and Labrador||$21 per $100 borrowed|
|Northwest Territories, Nunavut & the Yukon||$60 per $100 borrowed|
|Quebec||Limit of 35% annual interest rate (AIR)|
What fees will I have to pay?
Although Ontario has laws in place to protect consumers from predatory lending, you’ll still need to pay a maximum of $15 in fees for every $100 that you borrow. You have two business days to cancel a contract – known as the “cooling-off period” – for a payday loan without having to pay a fee. Payday lenders can’t give you a loan for more than 50% of your paycheque and the loan agreement must list all of the charges, terms and conditions of the loan.
Example: If your previous paycheque is $1,000, the most you can borrow is $500. If you take out a 14 day payday loan, the chart below shows you the maximum you can be charged.
|Paycheque||Max loan||Max charge||Cost of interest||Repayment Amount||APR (%)|
|$1,000||$500||$15 per $100||$75||$575||391.07%|
The table below demonstrates the fees you could pay for a payday loan versus a credit card.
|Loan Amount (over 2 weeks)||Payday loan fee||Credit card fee (23%)|
Can I get a no credit check loan in Toronto?
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?
If you’re struggling to stay afloat between paycheques, a short-term is a possible option. That being said, keep in mind that payday loans are often the most expensive solution for your short-term financial problems. There are plenty of alternatives – including assistance programs, personal loans and borrowing money from family members – so be sure to explore your options before signing on for an expensive payday loan.
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 six 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 lender in Toronto is legit?
The best way to make sure a lender is legitimate is to check their credentials with Consumer Protection Ontario. Look for the following signs to make sure you’re working with a reputable business.
- The lender displays an Ontario licence number. Always check that a lender is licensed. Be aware that there are companies that pose as payday loan lenders online but are actually just collecting your personal information for illicit purposes.
- It doesn’t allow roll-overs or multiple loans. Ontario law doesn’t allow payday lenders to give out multiple loans. This means you can’t use a second payday loan to pay off your first one.
- It provides same-language contracts. Your lender only provides contracts in a language you can speak comfortably.
- It follows consumer protection laws. Stay away from lenders who charge more than $15 in fees per $100 borrowed. If you’re charged more than the maximum rate allowed, you have the right to file a complaint with Consumer Protection Ontario.
Watch out for unlicensed 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 as a resident of Toronto, make sure that you’re dealing with a licensed Ontario business and be aware of potential risks.
- Illegally high interest rates or fees. If you aren’t borrowing from a lender that’s working legally, there’s a chance you’ll end up paying much higher rates and fees on your loan.
- Identity theft. Some unlicensed lenders work under the table to sell borrower’s personal and banking information to third parties, which could potentially lead to identity theft or a hacked bank account.
- Funds taken from your bank account without your permission. Lenders who aren’t restricted by the regulations of the province have been known to illegally withdraw money from borrower’s bank accounts when they’re unable to make repayments.
Unlicensed lenders can operate out of the province or even outside of Canada, making it difficult for Ontario to prosecute them. That’s why it’s so important to make sure your lender is licensed to operate in Ontario before you borrow money.
How to file a complaint against a lender
If you want to file a complaint against a lender, you can send a preliminary letter of complaint to the business. If they fail to respond, you can contact Consumer Protection Ontario, who will act on your behalf to contact the lender. If they find evidence of malpractice, they have the authority to take legal action against the business. This includes revoking its license, slapping it with a penalty and even filing a civil action to get a settlement for customers if the lender is facing numerous complaints.
Payday loan alternatives in Toronto
If you’re not sure you want to take out a payday loan, you have other options. Here are some programs and lenders you might want to check out.
Ontario assistance programs
Ontario has some programs that can help lower the costs of everyday expenses for some residents and newcomers who are struggling to make ends meet.
- Ontario child benefit provides low-income families with financial assistance to cover expenses like medical bills, food, rent and utility bills.
- Ontario Works can provide you with money and help you find a job during temporary financial difficulties.
- Resettlement Assistance Program provides financial assistance to refugees and protected persons for accommodations, essential clothing, household effects and living expenses.
- Income Assistance Program provides funding to First Nation communities to help their eligible members meet basic needs, such as food, clothing and shelter.
- Ontario Disability Income Support helps people with disabilities who are in financial need pay for living expenses, like food and housing.
Local financial institutions
Some credit unions and local banks offer less expensive small-dollar financing amounts with longer repayment terms. You could also look into credit builder loans, which come in small amounts and can help you improve your credit score by reporting every on-time repayment you make to credit bureaus. You also typically have more time to pay it off.
If you’re struggling with your personal finances, you might want to consider enrolling in a credit counselling program. These programs can help you make a budget and manage your debts for the long-term.
How can I apply for a payday loan?
If you’re interested in applying for a payday loan in Toronto, you’ll need to meet the following eligibility criteria:
- Be at least 18 years old
- Provide proof of 3 months of continuous employment
- Present 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
Payday loans can be a quick and easy solution for short-term financial difficulties, but they’re expensive and risky – they often throw borrowers into an endless cycle of debt. Since these types of loans come with high fees, they are only manageable if they can be paid off in full and on time.
If you’re considering taking out a payday loan in Toronto, familiarize yourself with the laws of Ontario to make sure you’re aware of the maximum amount of fees you can be charged, as well as other lending rules. As with all forms of credit, be prepared to pay for both the principal and the fees.
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