Payday loans in the Yukon
You'll pay a maximum of $60 in fees for every $100 you borrow.
Payday loans are the most expensive form of short-term financing on the market, with fees as high as $60 per $100 borrowed in the Yukon. While these convenient and easy to get loans can help you make ends meet between paycheques, they are expensive and risky and should be avoided unless absolutely necessary.
We’ve designed this guide to help you navigate the ins and outs of cash advance payday loans in the Yukon, so that you have as much information as possible to make an informed decision before applying.
Can I get a payday loan in the Yukon?
Yes, payday loans are legal in the Yukon. 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 the Yukon, as well as how much they can charge per $100 borrowed.
Here are the federal regulations surrounding payday loans in the Yukon:
- 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 the Credit Counselling Canada on 1800 007 007. It is open from 8:00am to 5pm, Monday to Friday. When comparing short term loans, ensure you take into consideration any fees, charges and rates you may be charged.
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 the Yukon
- Maximum loan amount: $1,500
- Minimum loan term: 1 – 2 weeks
- Maximum loan term: 62 days
- Maximum interest: $60 in fees for every $100 that you borrow
What fees will I have to pay?
Yukon 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 Yukon?
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 Yukon, which makes them a particularly risky kind of debt. Lenders are fairly unrestricted in terms of the fees and interest rates they can charge on loans, and there are also 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 the Yukon may choose to charge less for a 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.
How can I tell if a lender in the Yukon is legit?
Lenders in the Yukon have very few licensing requirements, which means they have very few legally-mandated obligations to protect customers. Even so, above-board lenders may choose to abide by laws that are commonly enforced across Canada. Look for the following signs where possible to make sure you’re working with a reputable company.
- The lender follows federal payday loans legislation. Stay away from lenders who charge more than $60 in fees per $100 borrowed. Make sure to compare several lenders to find the best terms for your loan (and keep an eye out for hidden fees buried in the fine print).
- They provide same-language contracts. Any payday loan agreement you sign off on should be written in the language of your choice. Your contractual obligations – including charges, terms and conditions of the loan – should also be clearly written out.
- The lender doesn’t request access to your bank account. Avoid any lender that requests direct deposit or any other banking information that could put your financial assets at risk.
Watch out for online lenders
Predatory payday lenders tend to work out of provinces and territories that don’t have stringent laws and regulations in place to protect consumers. These lenders can work from within the province, but they are more prone to set up shop online. If you’re thinking about taking out an online payday loan in the Yukon, make sure that you’re aware of the potential risks:
- Illegally high interest rates or fees. Lenders that charge more than $60 in fees per $100 borrowed are breaking federal payday loan regulations. Report their illicit activities to Consumer Protection at (867) 667-5111.
- Identity theft. Online lenders have been known to sell personal and banking information from borrowers to third-parties, leading to identity theft and hacked bank accounts. Avoid handing over direct deposit information and be wary of lenders who want personal details like your Social Insurance Number.
Since the Yukon doesn’t impose the same payday loan regulations as other parts of the country, there are more risks associated with borrowing payday loans both online and in-person. Make sure to read the fine print on payday loan contracts and look for alternative financing options whenever possible.
How to file a complaint against a lender
You can contact Consumer Protection at (867) 667-5111 to file a complaint. Since there are very few regulations governing payday lenders in the Yukon, it can be difficult to prosecute those who are operating illegally or unethically. 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 the Yukon
Due to the high fees and restrictive terms, it pays to explore other short-term financing options before applying for a payday loan.
Yukon assistance programs
The Yukon has a number of programs that can provide some much-needed relief for residents and newcomers who are struggling to make ends meet.
- Yukon Social Assistance provides financial assistance for low-income individuals and families who need help with covering the costs of basic necessities like food, shelter and heating.
- Child benefit provides a monthly cash benefit to help low‑ and modest‑income families with the costs of raising children under 18 years of age.
Local financial institutions
If you don’t qualify for social assistance benefits, you might like to try your local credit union or bank for short-term loans. Some of these institutions are working to counteract payday loan providers by offering low-interest, short-term loan programs to help customers with unforeseen emergency expenses at a fraction of the cost.
If you find yourself struggling to keep your head above water, then you might consider a credit counselling program like those on offer by the Credit Counselling Society of Yukon. These not-for-profit programs can provide free consultations to help you to manage or consolidate your debt and balance your budget.
How can I apply for a payday loan?
If you’re interested in applying for a payday loan in the Yukon, you’ll need to meet the following eligibility criteria:
- Be at least 19 years old
- Provide proof of at least 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
If you’re looking for a quick and easy solution to deal with a short-term financial problem, then you might consider a payday loan. But while they’re convenient and quick to get, you’ll need to make sure you understand the risks and high costs. Make sure you’re in the position to pay off the loan in full by the due date – with fees as high as $60 tacked on to every $100 you borrow. If you don’t think that you can pay back your loan on time, look into other alternative forms of financing such as a personal loan, line of credit or simply borrowing from family or friends.