Securing Payday Loans in Canada
In Canada, online payday loans must meet the laws set by the government. You’ll find the laws for each province on the Canadian Payday Loan Association’s website. Here are five tips for securing a payday loan in Canada.
Know How Much You Can BorrowThere are limits on how much you can borrow with Canada’s online payday loans. The government defines a payday loan as a loan of $1,500 or less borrowed for no more than 62 days. Some provinces have special rules too, such as British Columbia and Saskatchewan where the loan cannot exceed more than half of your pay during the loan period. This loan is given in exchange for a post-dated personal check or post-dated debit card transaction that covers the money borrowed and any fees and interest.
Know What Your Interest Rate Should BeEach province has its own rulings on the maximum interest rate that you can be charged when taking out a payday loan, so it’s good to know them. If a Canadian payday loan company tries to charge more than this, do not sign any paperwork.
- Alberta – 23% for initial loan period
- British Columbia – 23% for initial loan period
- Manitoba – 17% for initial loan period
- New Brunswick – Cannot have higher than a 60% APR
- Nova Scotia – 25% for initial loan period
- Ontario – 21% for initial loan period
- Quebec – Cannot have higher than a 35% APR
- Saskatchewan – 23% for initial loan period, 30% if you default
Understand the TermsMake sure you understand the terms to your online payday loan in Canada. The money you borrow is due in the set number of days, plus any interest. For example, if the company charges $25 for every $100 borrowed (25%) and you borrow $400, the amount you’ll owe on the due date is $500 ($400 loan plus 4 times $25.) If your post-dated check bounces, you face additional fees and the possibility of higher interest rates. Never sign the paperwork if you do not understand how much you will owe or when it must be repaid.
Find the Right Payday Loan CompanyThe Canadian Payday Loan Association represents more than a dozen companies. Throughout the country, there are more than 900 locations where you can get a payday loan, and some of those companies also have websites offering online payday loans in Canada.
Have Information AvailableIn Canada, online payday loan applications require a few items in order to qualify. First, you must be able to provide proof of income. Second, you have to have a valid bank account with a debit card or checks. All borrowers have to be at least 18 years of age. Finally, you cannot be in the process of filing a bankruptcy or have a bankruptcy currently on your record.
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