Did you know that depending on where you live in Canada the regulations governing payday loans can greatly vary? Regulations regarding how much lenders can charge, the maximum amount one can borrow, and how many loans one can take out at a time can be quite different depending on the province or territory you live in.
Thus, borrowers’ should always be aware of the regulations surrounding payday loans in their region. This way they can ensure that the loan service they choose meets the right terms, fees, and loan amounts as per the regulations of the government.
These short-term loans are generally associated with a high cost of borrowing. The last thing you want is to be paying more than the regulations state. To ensure this doesn’t happen to you, read on to learn more about what regulations impact each province or territory in Canada.
Payday loan services in Canada are available across all provinces and territories in Canada. You can either choose to apply for a loan online or visit the nearest cash advance store to get the money you need.
The northern territories of Canada including Yukon, Nunavut, and the Northwest Territories don’t have any local regulations or unique legislation governing payday loans. The regulations in these regions are subject to Canada’s federal government laws.
The province of Ontario is the economic hub of Canada and home to one of its latest cities; Toronto.
In Ontario, the maximum amount that an individual can borrow is set at $1,500 or 50% of an individual’s net income.
The loan term or payback period can not exceed 62 days and a borrower is allowed only one loan at a time.
Lenders are restricted from accessing a borrower’s bank account or wages unless the borrower has approved from pre-authorized debit. Payday loans in Ontario cannot be rolled over or extended unless the borrower takes out 3 loans within a 63-day period.
The maximum amount that lenders can charge in terms of fees is $15 per $100 borrowed.
The regulations governing payday loans in British Columbia are almost identical to that of Ontario.
The maximum amount that can be borrowed is $1,500 or 50% of an individual’s paycheque. Lenders are also allowed to charge a maximum of $15 for every $100 borrowed. The loan period can also not exceed 62 days.
The only difference is that in BC extended payment plans aren’t offered under any situation (no matter how many loans an individual may have taken out). Payday loans cannot be extended or rolled over.
Alberta follows much of the same regulations as Ontario and BC with a few minor differences.
The loan term in Alberta must be set between a minimum of 42 days and a maximum of 62 days. The maximum borrowing amount is $1,500 which isn’t subject to how much income you make. Other regulations remain the same.
Quebec is well-known for having its own unique legislation and regulations. Yet, when it comes to payday loans not much is different.
The maximum borrowing amount is set at $1,500 with a loan term that cannot exceed 62 days.
The only difference is the maximum amount a lender can charge which is set at a limit of 35% annual interest rate (AIR).
The beautiful island of Nova Scotia also shares much of the same provincial regulations governing payday loans.
The maximum borrowing amount is set at $1,500, however, payday lenders can charge up to $19 per $100 borrowed. The cost of borrowing in Nova Scotia is, therefore, higher than in the provinces mentioned above.
There are no restrictions on how many payday loans a borrower can take out at a time and no limitations on loans being extended or rolled over.
In Saskatchewan, payday loans work the same way as anywhere else in Canada. The province has a maximum borrowing amount of $1,500 or 50% of the borrower’s take-home income. The loan term cannot exceed 62 days and the loans can’t be rolled over or extended.
The maximum amount a lender can charge is $17 per $100 borrowed.
Manitoba has similar regulations to that of Saskatchewan with several subtle changes. The maximum borrowing amount is set at $1,500 or 30% of an individual’s net income. The cost of borrowing is the same ($17 per $100 borrowed). Other regulations also remain the same.
The maximum borrowing amount is set at $1,500 or 30% of the borrower’s net pay whichever is lower. The cost of borrowing is set at $15 per $100 borrowed. There are however no restrictions on the loans being rolled over or extended.
Payday loan regulations in Newfoundland and Labrador are much the same as in the other provinces. The only difference is the cost of borrowing. Lenders can charge up to $21 per $100 borrowed.
The maximum borrowing amount is $1,500 or 50% of a recipient’s take-home pay (whichever is lower). Terms of loan cannot exceed 62 days with loans unable to be rolled over or extended.
The regulations in PEI are pretty straightforward. The maximum cost of borrowing is set at $15 per $100 borrowed. The maximum borrowing amount is $1,500 with a loan term that cannot exceed 62 days.
The regulations for payday loans in these regions are subject to federal laws. The maximum borrowing amount is set at $1,500 with a loan term that cannot exceed 62 days. No other restrictions or limitations are in place.
The cost of borrowing is the highest in Canada at $60 per $100 borrowed.
When one is in need of urgent money to take care of an unforeseen expense nothing beats the convenience, ease, and speed of payday loans. These short-term loans can be secured in a matter of minutes from a multitude of online and brick-and-mortar lenders.
However, before opting for a payday loan to help you out in your time of financial need It is highly recommended that you look up the regulations surrounding these loans in your province or territory.