Payday Loans in Canada Explained Before You Borrow
Short on cash before payday? CCFD explains how online payday loans work in your province and shows the legal maximum cost up front. If a loan makes sense for you, we send your free application to a lender licensed where you live.
Maximum cost at $14 per $100 in the nine provinces that license payday lending. *Annual rate shown for a 14-day loan; a longer term means a lower rate. Your lender's offer depends on your province and income.
What is a payday loan in Canada?
A payday loan is a small, short-term loan, from $100 up to $1,500, that you repay from your next paycheque or over a few pay periods, within 62 days at most. In the nine provinces that license payday lenders, the total cost is capped at $14 for every $100 borrowed. That makes it one of the most expensive ways to borrow, so it's meant for a one-time emergency you can clearly repay, not for regular bills.
CCFD is not a lender. We explain the rules, and if you apply, we pass your application to a licensed lender who decides and sets the terms. Applying is free and you never have to accept an offer.
How Online Payday Loans Work, Step by Step
The whole process happens online. The one step you should never rush is step three.
Apply Online
The form takes about five minutes: your contact details, how you're paid, and the chequing account you'd like the money sent to. There's nothing to fax.
A Licensed Lender Reviews It
Lenders look mostly at your income and recent bank activity, often through a secure, read-only bank connection. A low credit score isn't an automatic no.
Read the Agreement
It must show the amount, total cost, annual rate, due dates and the lender's licence number. Check the payments against your pay dates. If it doesn't fit, say no.
Get Paid, Then Repay
Once you sign, funds usually arrive by Interac e-Transfer or direct deposit. Repayment comes out of your account on the dates you agreed to.
What a Payday Loan Costs in Canada
Since January 1, 2025, federal rules cap licensed payday loans at $14 per $100 borrowed, and that includes every fee. Here's what that looks like in dollars.
| You borrow | Maximum cost | Maximum to repay |
|---|---|---|
| $200 | $28 | $228 |
| $300 | $42 | $342 |
| $500 | $70 | $570 |
| $1,000 | $140 | $1,140 |
| $1,500 | $210 | $1,710 |
Why $14 Is More Than It Sounds
Fourteen dollars sounds small, but it's charged for a few weeks, not a year. On a typical two-week loan, $14 per $100 works out to an annual rate of about 365%. A credit card is usually around 20%.
The easiest way to pay less is to borrow less. If you need $300, don't accept $600 because it was offered. Borrowing a second time to pay off the first loan is how short-term borrowing turns into a cycle.
- No rollovers. A lender can't give you a new payday loan to pay off the one you already have with them.
- No upfront fees. Nobody can charge you to get a loan. Anyone asking for a fee first is a scam.
- A cooling-off period. You can cancel shortly after signing, two business days in Alberta, BC and Ontario, by returning the money.
- A licence you can check. The lender's provincial licence number must appear on your agreement.
When a Payday Loan Makes Sense, and When It Doesn't
A payday loan is a tool for one specific job: covering a one-time gap until your next deposit. Be honest with yourself about which column you're in.
It can make sense if…
All of these should be true.
- The expense is urgent and one-time, like a car repair you need to get to work or a utility bill before a disconnection.
- You know exactly which paycheque will repay it.
- After repaying, you'll still cover rent, groceries and bills until the next deposit.
- You've checked the cheaper options below and none of them works in time.
Think twice if…
Any one of these is a warning sign.
- You're not sure you can repay on the due date.
- The money is for regular costs, like rent every month.
- You already have one or more short-term loans.
- You'd be borrowing to pay off another loan or debt.
Cheaper options to check first
Each of these usually costs less than $14 per $100. One phone call can save you the fee.
Ask for a payment plan
Utilities, phone companies and landlords often agree to split a bill or move a due date if you call before it's late.
Employer pay advance
Some employers will advance part of wages you've already earned, at no cost.
Overdraft or credit card
Interest on an overdraft or a card cash advance is high, but usually well below a payday loan for the same few weeks.
Credit counselling
If you're behind on several bills, a non-profit credit counsellor can help you build a plan at no charge.
What Payday Lenders Usually Look For
Every lender sets its own criteria, and approval is never guaranteed. These are the basics most licensed lenders ask for.
- Age of majority in your province18 in Alberta, Manitoba, Ontario, PEI and Saskatchewan; 19 in BC, New Brunswick, Newfoundland and Labrador, and Nova Scotia.
- Regular incomeUsually from a job. Some lenders also consider pension, disability or other steady benefits, and most want income history of at least a few months.
- A Canadian chequing accountActive and in your name, able to receive deposits and pre-authorized payments.
- An address in a province that licenses payday loansPayday loans aren't available through CCFD in Quebec, Yukon, the Northwest Territories or Nunavut.
- A working phone number and emailLenders send your agreement and any verification requests electronically.
Payday Loan Rules by Province
The $14 cap is the same everywhere payday lending is licensed, but loan limits, repayment and cancellation rules depend on your province. Start with your province's guide.
Other province guides
City guides
Quebec and the territories: Quebec caps lending at 35% a year, so there are no licensed payday lenders there. Yukon, the Northwest Territories and Nunavut don't license payday lending. Be wary of any website offering payday loans to residents of these areas.
We Educate, Then We Serve
CCFD has helped Canadians understand payday loans since 2012. Our slogan sets the order: understand the cost and your rights first, then decide whether to borrow.
A referral service, not a lender
We don't lend money, make credit decisions or set loan terms. If you apply, your application goes to a lender licensed in your province, and that lender decides. We never charge you a fee, and you're never obliged to accept an offer.
Guides first, applications second
Every guide on this site is written in plain language and checked against federal and provincial rules. We publish the true cost, the warning signs and the cheaper alternatives, even when they mean you don't apply. Our responsible lending commitments.
Your information, protected
Applications are sent over an encrypted connection and shared only with the lender reviewing your request. We don't sell your details to unrelated companies. Read our privacy policy.
Sources we check
We review the facts on this page against these official sources and update it when the rules change. Last reviewed October 26, 2026 by the CCFD Editorial Team.
Payday Loan Guides
Start with the basics, then read the guide that matches your situation.
How Online Payday Loans Work in Canada: A Simple Guide for First-Time Borrowers
What lenders check, what it costs, how repayment works and what to review before you accept an offer.
Read the guide →Payday Loan Questions, Answered Plainly
Short Before Payday? Know the Cost First.
Check if you qualify. Apply online in about 5 minutes: it's free, goes only to lenders licensed in your province, and you see the full cost before you sign.