Can you repay your short term loan early?

Learn how you can save on fees if you repay your payday loan early.

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If you know you’ll be able to pay off your short term loan early – great! Repaying early can save you money in interest fees and make your budget easier to manage. However, not all lenders have the same rules in place when it comes to repaying your loan early, so if you’re planning to do so, it’s important to ask ahead of time if there are any restrictions on paying it back early.

What to look for when comparing short term loan lenders

If you know ahead of time that you’ll be able to pay back the loan quicker than the term offered, you’ll want to check to see if you will be able to pay off, or settle, the loan amount early without facing any additional fees or penalties. If it isn’t immediately apparent when looking over the loan terms and conditions, be sure to contact the lender and ask this question specifically. Always double-check the contract before you sign and agree to the terms.

⚠️ 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.
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Compare short term loan options

Check the websites of any lenders you’re interested in to confirm they operate in your province of residence.

Name Product Max. Loan Amount Serviced Provinces/Territories Turnaround Time Term of Loan APR
Cash Money Payday Loan
$1,500
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Within 2 hours with INTERAC e-Transfer® if approved
12-14 days. Varies by Province
Varies by Province
Apply for your first $300 payday loan at a $20 borrowing cost (excludes Alberta, Manitoba, New Brunswick or Saskatchewan applicants).

Click "View details" link under "Go to site" button to reveal borrowing costs.

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What you need to do to repay your loan early

When you’re ready to repay your short term loan ahead of its due date, make sure you do the following:

  • Check your loan contract

Your loan contract will establish any fees or penalties you might have to pay, as well as any stipulations regarding early repayment of your loan. It’s best to be aware of these before you get in touch with your lender.

  • Contact your lender

The contact information for your lender will be listed on any correspondence, as well as on the lender’s website. You can usually contact lenders by email or phone, and some also offer online chat and in person assistance (if they have physical store locations).

Ask how you are able to repay your loan early, what fees apply and if any savings or discounts are available. You should also ask how quickly you can settle the loan, because the more quickly it can be settled, the more you can save on interest fees.

  • Pay out your loan

Follow the instructions given to you by the lender to ensure the loan is paid out correctly. After you pay the loan out, make sure your loan account is closed to avoid any extra charges that are added by mistake to the account.

Everything you need to know about payday loans

Are payday loans available in my province or territory?

Payday loans are available in all provinces and territories across Canada. You should be aware that payday loans are regulated by individual provinces, meaning costs and fees can vary. Ensure that any lender you choose abides by the laws of the place you live.

At the time of writing in July 2018, the Yukon, Nunavut and the Northwest Territories do not have legislation regulating payday loans.

Find out how much lenders can charge across Canada

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