How payday loans work in Ontario: costs and your rights
What a payday loan costs, what lenders can and can't do, and how to check you're dealing with a licensed lender.
Key facts
- Max cost in Ontario: $14 per $100 borrowed.
- Example: $500 for 14 days costs $70 (365% APR). You repay $570.
- You can cancel within 2 business days, no penalty, no reason needed.
- No rollovers: you can't roll one payday loan into another from the same lender.
- A lender can't lend you more than 50% of your net pay per loan.
What is a payday loan?
A payday loan is a small, short-term loan you repay on your next payday. In Ontario it's unsecured, and the province calls it the most expensive form of consumer loan, so it's best kept for short-term emergencies.
What does a payday loan cost in Ontario?
Since January 1, 2025, the maximum cost of borrowing for a payday loan in Ontario is $14 for every $100 you borrow. Loansville charges $14 per $100.
| You borrow | Cost of borrowing | You repay |
|---|---|---|
| $100 | $14 | $114 |
| $300 | $42 | $342 |
| $500 for 14 days | $70 (365% APR) | $570 |
Lenders must show the cost as an annual percentage rate (APR) in ads and agreements. That's why a two-week loan at $14 per $100 shows as 365% APR.
Your rights under the Payday Loans Act, 2008
- Cooling-off period: cancel within two business days without a penalty and without giving a reason.
- No bundling: you can't be sold or offered other goods or services in connection with your payday loan.
- No rollovers: you can't get another payday loan from the same lender until the first is paid in full.
- 50% cap: a lender can't lend you more than 50% of your net income per loan.
- Clear contract: the first page must show the amount, the number of days and what you'll pay.
- No wage assignments: a lender can't take payment straight from your paycheque.
What if I can't pay on time?
Ontario caps what a lender can charge when a loan is in default:
- Interest of up to 2.5% per month (non-compounding) on the outstanding principal.
- A dishonoured payment fee of up to $20, charged only once. Loansville's fee is $20, once per agreement.
Lenders also can't contact you more than three times a week or on holidays, contact your family, friends or neighbours, or use threats or excessive pressure. If you take out three loans within 63 days, the lender must offer you an extended payment plan so you can repay in instalments. Struggling? Email us early at [email protected].
How do I know a lender is licensed?
Look for an Ontario licence number before you apply, online or in a store. Loansville's is #4741249. Ontario also warns about "lead generators" that pose as lenders and sell your information, so check the licence first.
Quick answers
What is the maximum payday loan fee in Ontario?
$14 for every $100 borrowed. On a $500 loan for 14 days, that's $70 (365% APR), so you repay $570.
Can I cancel a payday loan in Ontario?
Yes. You have two business days to cancel without a penalty and without giving a reason.
Are rollover payday loans allowed in Ontario?
No. You can't get a new payday loan from the same lender until your current one is paid in full.
Sources: Government of Ontario, Payday loan: your rights (updated Dec 31, 2024); Payday Loans Act, 2008, S.O. 2008, c. 9; O. Reg. 98/09. General information, not legal advice.