Loans
Payday Loans in Canada: Costs and Alternatives
What payday loans cost under provincial rules, why they are so expensive, and cheaper ways to cover a short-term gap.
How much does a payday loan cost?
In provinces that regulate payday loans, the maximum is $14 for every $100 borrowed.
| Way to borrow $300 for 14 days | Approximate cost |
|---|---|
| Payday loan at $14 per $100 | $42.00 |
| Credit card cash advance | $7.65 |
| Overdraft protection | $7.42 |
| Line of credit | $5.92 |
That is about 365% a year on a 14-day loan. A $300 payday loan costs up to $42 for two weeks.
Put it into practiceCash advance appsWhat are the rules?
Payday loans are regulated by the provinces. In most, a lender can’t roll over or extend your loan, and must be licensed.
Avoid online payday lenders based outside Canada; problems with them are hard to resolve.
What are the alternatives?
An interest-free cash advance app, overdraft protection, a line of credit, asking a creditor for more time, or a pay advance from your employer.
The cost figures in the table come from the Financial Consumer Agency of Canada’s own example.
Keep reading
LoansHow Do Cash Advance Apps Work in Canada?How cash advance apps work, what they really cost, how they compare with payday loans, and who can use them.- Fees and borrowing costsHow Credit Card Cash Advances Work in CanadaA cash advance lets you take cash from your credit card, but it usually costs a fee plus a higher interest rate charged from the same day, with no grace period. What it costs and what to use instead.
LoansHow Personal Loans Work in CanadaWhat a personal loan is, how lenders set your rate, what it costs and what you need to apply, explained step by step.
LoansSecured vs Unsecured LoansWhat collateral means, how it changes the rate, and what you risk if you can’t pay.
Official sources and further reading
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