How payday loans work in Toronto
Toronto is Canada's largest city and one of its most expensive places to live. With rent taking a big share of most paycheques, a surprise bill can leave a gap before payday.
Every payday loan in Toronto follows Ontario's Payday Loans Act, 2008. You can borrow $100 to $1,500, but no more than 50% of your net pay for the pay period. The cost can't exceed $14 per $100, the loan is usually due in one payment on your next payday, and you have two business days to cancel with no penalty.
What a payday loan costs in Toronto
| You borrow | $500 |
|---|---|
| Maximum cost ($14 per $100) | $70 |
| Total to repay | $570 |
| Due | One payment on your next payday |
| Take-home pay needed (50% rule) | At least $1,000 per pay period |
| APR on a 14-day loan | 365% |
If you take out three payday loans from the same lender within 63 days, Ontario requires the lender to offer an extended payment plan, letting you repay in instalments over several pay periods with no extra fees.
Borrowing in Toronto: what to know
Because Ontario caps a payday loan at 50% of your net pay, how much you can borrow in Toronto depends on your take-home pay, not on the city's cost of living. If rent is the problem, a one-time loan won't fix a monthly shortfall. Talk to a credit counsellor before borrowing twice in a row.
Getting your money in Toronto
You can apply from anywhere in Toronto, including Etobicoke, North York, Scarborough and East York. Once you e-sign your agreement, your lender sends the loan by Interac e-Transfer. Weekday morning applications are often funded within a few hours; evening and weekend applications usually fund the next business day.
Every lender we work with is licensed in Ontario. Lenders must show their licence number and the total cost of the loan before you sign. If a website offering loans in Toronto can't show an Ontario licence or asks for money upfront, don't apply.
Free financial help in Toronto
Toronto residents can call 211 for emergency rent and utility supports, and non-profit agencies that belong to Credit Counselling Canada, such as Credit Canada, offer free counselling in person, by phone or online.
If you believe a payday lender broke Ontario's rules, you can file a complaint with Consumer Protection Ontario. For free legal information, your local community legal clinic can help.