Are Payday Loans Legal?

All across the world, people ask what is a payday loan and if they are allowed to get one. Each country, and in our neighbor to the south each state has its own rules about payday loans. That’s what can make matters so complicated. Today, we’re talking about the laws regarding payday loans in Canada and what you should know if you are thinking about getting one. 

What is a Payday Loan?

To begin talking about the legality behind a payday loan, we must first talk about what it is. If you take out a short term loan, chances are you are taking out a type of payday loan. Compared to a long-term loan, these types of loans are usually reserved for emergencies and are paid back within a relatively short period of time.

When borrowing, you will be expected to pay the loan back either from your next paycheck or throughout the next two or three paychecks. If you do not, you may face more considerable fees which can impact your overall debt level.

That’s why fast cash loans are meant to cover shortfalls should an unexpected event happen. For example, an emergency furnace replacement during the cold Canadian winter or car repair that was required for you to keep your job are ways these types of loans are often used. 

What Laws Surround Payday Loans?

Each province and territory has different rules regarding payday lenders. Make sure that any online loan institution you choose is licensed in your area and follows the provincial regulations that protect you as the borrower. To summarize what could be a complicated list, we’ve gathered all major rules by province, just look for yours to find out what is and is not allowed. 

ProvinceMaximum Cost of Borrowing $100 for two weeksCooling off period to cancel the loanMaximum penalty for returned cheque or failed pre-authorized debitNo forms for directly transferring wagesNo extensions or roll overs on your loanFurther provincial specific laws
Alberta$152 Business Days$25YesYesYes
British Columbia$152 business days$20YesYesYes
Manitoba$1748 hours, excluding Sundays and holidays$20Yes Yes
New Brunswick$1548 hours, excluding Sundays and holidays$40 (default penalty)YesYes 
Nova Scotia$19Next business day$40 (default penalty)YesYesYes
Ontario$152 business daysN/AYesYesYes
Prince Edward Island$252 business daysN/A   
Saskatchewan$17Next business day$25YesYesYes

What is iCash

iCASH is a Canadian online payday loan lender that is changing the face of cash advances and short term loans. Rather than complicated qualification requirements and high credit scores, iCASH offers a quick online application that gives you a yes or no answer right there. Safe, reliable loans from a direct lender that’s licensed in each province that they operate in. Get the money you need without the debt trap that’s often associated with other payday lenders. 

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