Debt Options Guide
Payday Loan Debt in Canada
Updated
Since January 1, 2025, the federal Criminal Code caps payday loan costs at $14 per $100 borrowed, and caps the interest rate on most other loans at 35% APR. Even at the cap, a two-week payday loan is very expensive when it is rolled over repeatedly. Payday loans are unsecured debt, so they can be included in a consumer proposal or bankruptcy.
Breaking the cycle
- Stop taking new loans to pay old ones
- Ask the lender about an extended payment plan — several provinces require one to be offered for repeat borrowers
- Build a short bare-bones budget to see what you can pay
- If several payday loans are outstanding, talk to a Licensed Insolvency Trustee about including them in a proposal
Check your provincial rules
Payday lending is licensed provincially. Your provincial consumer protection office lists licensed lenders and the rules on rollovers, cooling-off periods and repayment plans.
Free tools
Related guides
- Consumer Proposal in Canada: How It WorksHow a consumer proposal works in Canada: who qualifies, the $250,000 limit, the 5-year maximum, the creditor vote, credit impact and what it costs.
- Your Rights When a Collection Agency CallsWhat collection agencies can and can't do in Canada, how to verify a debt, limitation periods by province, and which provincial regulator to complain to.
- Debt Settlement in CanadaHow to negotiate a debt settlement with a creditor or collection agency in Canada, how to protect yourself in writing, and the risks of for-profit debt settlement companies.
Sources
DebtDefender is an independent information site, not a Licensed Insolvency Trustee or law firm. This guide is general information, not advice for your situation. See our disclaimer.