Quick Payday Loan Regulations Where You Live

Payday loans provide an easy way to get quick cash, especially if you get one from an online lender. Canada imposes strict regulations for these, which protect you from unscrupulous lending practices. When you borrow money through licensed online lenders, you have the protection of your province or territory and it is totally different from shopping online.

However, it’s best to be wary as some online lenders are not licensed operators and ignore the rules. So check the loan agreement thoroughly before signing up for a payday loan online. Make sure they are not charging you higher interest rates than allowed in your province. Find the payday lending rules per province in Canada.

Note that Northwest Territories, Nunavut and Yukon do not have specific rules for payday loans. Contact your Consumer Affairs Office for assistance.

Alberta, British Columbia, New Brunswick, Ontario, Prince Edward Island

Regulations in Alberta, British Columbia (BC), New Brunswick, Ontario, and Prince Edward Island limit the interest that payday loan businesses can charge to 15% ($15 for every $100 borrowed). These include interest, fees, and any other costs of borrowing.

Lenders in these provinces (except Prince Edward Island) may not roll over a loan while sitting on the sofa. They must provide borrowers with a cooling-off period of two business days, meaning borrowers can cancel the loan without penalty. Alberta, BC, Prince Edward Island, and Ontario place a maximum of 62 days for a loan term, while New Brunswick does not.

The maximum penalty the lender can charge for a returned cheque or failed debit for Alberta is $25 and $20 for BC and New Brunswick. Prince Edward Island and Ontario do not place a limit on these penalties.

Click on the links to check if your online lender has a license to operate in Alberta, British Columbia, New Brunswick, and Ontario. Prince Edward Island does not provide this facility.

Manitoba, Saskatchewan

Both Manitoba and Saskatchewan limit payday lender charges to $17 for every $100 borrowed and the term to 62 days. However, while Saskatchewan prohibits a payday loan rollover, Manitoba does not. Moreover, Saskatchewan only requires a cooling-off period of one day, while Manitoba requires two days. Manitoba restricts penalty fees to $20 for dishonoured cheques or authorized debits, while Saskatchewan limits it to $25.

You can check for the license status of an online lender in Saskatchewan. You may contact Manitoba’s Consumer Protection Office for assistance.

Nova Scotia, Newfoundland and Labrador

Regulations in Nova Scotia set the maximum allowable charges for payday loans at $19 for every $100 borrowed. Newfoundland and Labrador sets it higher at $21.

Both provinces provide a cooling-off period of two days and impose a limit of 62 days for each payday loan. However, lenders may roll them over. The penalty fee for returned cheques or dishonoured authorized debits cannot exceed $20 for Newfoundland and Labrador and $40 for Nova Scotia.

Nova Scotia provides a list of licensed payday lenders in the province. You may contact Newfoundland and Labrador’s Consumer Affairs Division for assistance.

Know Your Rights with Payday Loans

Getting payday loans from online lenders is a temptingly easy way to get quick money, even if you have poor credit standing. However, you should know your rights regarding what payday lenders can and cannot do under the law. To ensure you don’t get in over your head with payday loans, borrow money through GoDay only or other licensed lenders in your province or territory. Highly-reputable lenders like GoDay will ensure that you get your quick cash fix while protecting your interests.

Isabella Carter

Isabella Carter graduated with a Bachelor's in Economics from the University of Michigan and has been a guiding light in the field of personal finance for over a decade. Joining our team as a freelancer in 2021, she has since provided invaluable insights into budgeting, investments, and financial planning. Her prior experience includes a stint as a financial consultant at a top-tier firm. Isabella's passion for demystifying financial concepts for the everyday person shines through in her writings. Beyond numbers, she enjoys hiking and photography.

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