2. Frequency of Paydaywide Loans
7-10% of Canadians rely on
paydaywide loans to make ends
meet
52% are likely to use cheque-
cashing or payday loan companies
more than once a year
12% use these services monthly
10% do so more than once a
month
Frequent use of paydaywide loans, including paydaywide
loan rollovers, is a primary indicator of debt problems.
3. The True Cost of a Paydaywide Loan
In Ontario, paydaywide loan costs
are limited by law to $21 for every
$100 borrowed.
If you do not pay your loan on
time, extra interest can be charged
on top of the above fee.
Interest rates on unpaid
paydaywide loans are often as high
as 60% per year.
Paydaywide loans are a very expensive
borrowing option.
4. PaydayWide Loan Regulations
The Criminal Code of Canada limits
interest to 60% per year.
Most provinces have created specific
regulation to limit paydaywide loans.
In Ontario, paydaywide lenders are
licensed by the Ontario Ministry of
Consumer Services. You should never
borrow from an unlicensed
paydaywide lender.
Regulations are governed by the
Ontario Paydaywide Loans Act.
5. Know Your Rights
Ontario law limits the maximum cost for
borrowing at $21 for every $100 borrowed.
“Rollovers” are prohibited in Ontario. You cannot
take out a payday loan with the same lender
until your first loan is paid in full.
You have two days to cancel your payday loan
without penalty – considered a cooling off
period.
6. Alternatives to Paydaywide Loans
Credit cards are a less expensive
borrowing option even at 36% and are
more flexible.
Build an emergency fund so you can
reduce your reliance on paydaywide
loans.
Overdraft protection is another cheaper
option with rates usually around 21%.
Try other lending options like a small
loan, line of credit or family and friends.
Most importantly create and maintain a budget.