If you use payday loans or are planning on taking out a payday loan in BC, the two most important things you can do are to borrow from a licensed lender and understand the cost of your loan. Find out how to do these two things to protect yourself.
Payday loans: two things you need to know
1. Make an informed decision about payday loans
A payday loan is a short-term loan with high fees that make it an expensive way to borrow money. With these loans, you can’t borrow more than $1,500 and it must be repaid within 62 days.
There’s a lot to think about before you take out a payday loan – or any loan for that matter. Take some time to read through the terms of the agreement, understand the total cost of the loan (including all fees or penalties/interest for late payments), and ensure you can pay it back. Then decide if it’s the right choice for you.
Go to the Financial Consumer Agency of Canada’s website for more resources to help you make informed financial decisions, understand the total cost of your loan, and compare different financial products:
2. Use a licensed payday lender if you decide to use a payday loan
If you are considering a payday loan, protect yourself and make sure you are using a licensed lender.
Payday loans: why licensing matters
By law, payday lenders in BC are required to be licensed by us. If you decide to take out a payday loan, it’s incredibly important to make sure the business you are borrowing money from is licensed. This means they are inspected and are meeting the licensing requirements.
Payday lenders must follow certain laws if they are lending to BC consumers, including how much they can charge you. When a business is licensed and regulated, that means that you have rights as a borrower and a place to go for help if the business breaks the rules.
The risks of borrowing from an unlicensed payday lender
If a lender is not licensed when they are required to be, they are already operating outside of the law – potentially like a scam or criminal enterprise. These are not legitimate lenders. They could be charging you more than what’s legally allowed or use illegal and threatening collection behaviour, like repeatedly calling your place of work. You may also have limited options if things go wrong.
Where to go for more information
We license payday lenders in BC and regulate certain aspects of their business practices. Read through our resources on our website to learn about your rights when it comes to payday loans. If you believe a licensed payday lender is breaking the rules after reading through that information, submit a complaint to us directly.
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About Consumer Protection BC
We are not-for-profit regulator responsible for overseeing certain industries and specific consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we can’t help you directly, we will try to offer a referral to a relevant organization, if one exists. Other times, court or legal assistance may be the best option. Explore our website at www.consumerprotectionbc.ca.