Your rights as a payday loan borrower in Ontario

Before you borrow: is a payday loan the right tool?

A payday loan is designed to cover a one-time gap until your next pay. It is one of the most expensive ways to borrow, so it's worth checking these first:

• Your bank or credit union: an overdraft or small line of credit usually costs far less.
• Your employer: many will advance part of your pay.
• The creditor you need to pay: utilities and landlords often agree to a short extension if you ask before the due date.
• Free credit counselling: non-profit agencies accredited by Credit Counselling Canada help with budgets and debt at no charge.
• The Government of Canada's guide: Payday loans (Financial Consumer Agency of Canada) explains costs and alternatives.

If a payday loan is still the right choice, here is what the law guarantees you.

The cost is capped

A lender may charge no more than $14 for every $100 borrowed. For a $500 loan over 14 days that's $70, so you repay $570 (APR 365%). Nothing else may be added to the cost of borrowing: no application, brokerage or "processing" fee.

You can cancel within two business days

You may cancel a payday loan for any reason by the end of the second business day after you receive the money. Return the amount advanced and you owe nothing. After that, you can still repay early at any time without penalty.

Loans are limited to half your net pay

A lender may not lend you more than 50% of your net pay for the pay period, and never more than $1,500. The loan term may not exceed 62 days.

No rollovers, no back-to-back loans

A lender cannot give you a new payday loan to pay off an existing one, and cannot issue a new loan until your previous loan is fully repaid.

Extended payment plans

If you take out a third payday loan within 63 days of your first, you are entitled to an extended payment plan: repayment in instalments over a longer period rather than a single payment on your next pay date.

Limits on what happens if you miss a payment

If a payment is returned or is late, a lender may charge at most a one-time fee of up to $25 for a dishonoured payment and interest of up to 2.5% per month on the overdue balance. Lenders and collection agencies must also follow Ontario's rules on collection practices: no threats, no contacting your employer to disclose the debt, and limits on when and how often they may contact you.

You must receive a written agreement

Before you get your money you receive a written loan agreement stating the amount advanced, the cost of borrowing in dollars and as an APR, the due date and your cancellation rights. If we lend to you online, we communicate this information, including our licence details and this educational material, before the agreement is made.

Our commitments to you

• We verify your income and never lend more than the law allows.
• We explain the cost, in dollars and as an APR, before you sign.
• We will not offer a new loan to repay an existing one.
• We use your information only to assess and administer your loan.
• If you're struggling to repay, call us before the due date. We'll go through your options, including an extended plan where you're entitled to one.

Complaints

If something has gone wrong, tell us first: call 905-436-0000 or email info@paydayloandirect.ca. If we can't resolve it, you can contact Consumer Protection Ontario (1-800-889-9768), which regulates payday lenders under the Payday Loans Act, 2008.

Learn more

• Payday loan: your rights (Ontario.ca)
• Payday loans (Financial Consumer Agency of Canada)
• Our rates and fees · FAQ

Licensed lender: 2742565 Ontario Inc., operating as Payday Loan Direct. Ontario Payday Lender Licence #4741042. This page summarises Ontario law in plain language; it is not legal advice.