As of January 1, 2025, under the Criminal Code of Canada, payday lenders can’t charge more than $14 for every $100 borrowed, including all charges and fees (down from $15 per $100 borrowed). So let’s talk about that some more…
First of all, what is a payday loan?
A payday loan is a small short term loan. Borrowers may not receive more than $1,500 and it must be repaid within 62 days of receiving it.
How are payday lenders regulated in BC?
Payday lenders have been regulated in BC since 2009 and Consumer Protection BC licenses and regulates the sector. BC’s payday lending law protects borrowers by defining what a payday loan is, by setting a maximum allowable cost of borrowing, by providing cancellations rights to borrowers, by setting out disclosure requirements, by requiring licensing and by outlining prohibited practices and maximum penalties for violations.
What are some key things to know about your payday lending rights?
- The most you can be charged is $14 for every $100 borrowed, including all charges and fees – no matter what.
- You should not be charged for cash cards.
- Insurance is optional. It’s okay to tell the business that you don’t want insurance.
- If you are getting your 3rd loan in 2 months, you can pay it back over 3 bi-weekly pay periods.
What if you got a payday loan before January 1, 2025?
If you have a loan that was entered into before January 1, 2025, the maximum you can be charged is $15 for every $100 borrowed (including all charges and fees). Once you pay it off and take out a new loan, the new rate will come into effect.
There’s a lot to know about your rights and responsibilities around payday lending. You are welcome to read the payday loans regulation in full or find out who is licensed by visiting our website at www.consumerprotectionbc.ca. If you have any questions about payday lending in BC, please contact us or leave us a comment here.
ADDITIONAL READING:
What would you do? A guide to being a savvy consumer: payday loans
The BC government’s news release: New, lower maximum charges for payday loans now in effect
I used to work in this industry, first as teller and worked up through the years.
I finally had to leave because I couldn’t stand what the payday advance industry is in the business of doing: keeping people in debt in order to profit.
I couldn’t sleep at night, hated myself, and almost let that industry ruin me. So glad I left. That was 12 years ago and I think they should be illegal.
I used the service once about 20 years ago when I was in a short term jam. Was VERY grateful for it at the time, but glad that I haven’t had to use it since.
Janet M. Good for you for having a conscience. I agree, these companies should be illegal. They only serve to trap those who can least afford it into never-ending debt.
Hi there,
Is it legal for a short term loan lender to charge a broker fee?
All in all, I have been charged 50% on my loan.
Hi Shari, thanks for reaching out to us here. Is this a payday loan specifically? If so, I think we may need some more info from you. Can you give our inquiry centre a call at 1.888.564.9963? Thanks so much.
Hi I have several payday loans now i am declaring bankrupcy because of them but one of the payday loans that i am very late on they try and take the money from my account 3 maybe 4 times a month is that legal
Hi Steven, thanks for checking in with us. How often a payday lender can attempt to take payments is up to the contract you signed. Would you be able to submit an official complaint form online? Here’s the link to it. We would like to take a look at your contract as well if you have it. Thank you, Steven!