Payday loans

Payday lenders can’t charge more than $15 for every $100 borrowed, including all charges and fees. A loan must not be more than 50% of your paycheque.

The payday lenders must have posters showing the rates that they charge.

You should not pay more than $15 for every $100 borrowed, no matter what.

You should not be charged for cash cards. 

A payday lender is not allowed to sell you insurance. Nor should they require or request that you get your loan insured.

Please be aware that you should never pay upfront to borrow money. Though some companies may ask you to pay money to secure a loan, this is illegal in BC.

The law requires that payday lenders include specific information in your loan agreement. This ensures that you fully understand your loan and your obligations. The lender must give you a copy of your loan agreement and must go over the agreement with you at the time of signing. The following information must always be included in your loan agreement:

• The name, address, contact information, and license number of the payday lender
• The identity of the person taking the loan
• A statement that it is a high-cost loan
• The borrower’s cancellation rights
• The amount you initially borrowed before interest and fees, also known as the principal
• The total amount owing, including all fees and interest
• The time frame of the loan
• The date that each payment is due
• Information about what you can do if they don’t meet their obligations

You can repay your loan in full at any time before the due date and you must not be charged extra for doing so. The law does not, however, cover making partial payments early. If you think you may want to make partial payments early, talk to the loan provider ahead of time. This is something you can ask about when shopping around for a payday lender that meets your needs.

By law, you have two business days to cancel your payday loan. You must not be charged extra for cancelling. After this cancellation window, you may need to follow the lender’s cancellation policy. This information should be included in your loan agreement.

Payday lenders must not issue you more than one loan at the same time. They are also not allowed to roll over your loan. This means that they can’t renew a loan at an additional cost to you or issue you a new loan to pay an old one.

If you are getting your third loan in two months, you can pay it off in three bi-weekly payments.

The internet has made it easier than ever to get access to payday loans. Some lenders may be across the country or even across the world. If you are in BC, and thinking about taking an online payday loan, here are some tips for you:

• Make sure that you are dealing with a licensed business. No matter where the payday lender is located, if they are lending to BC residents, they must have a licence with us. This is the only way to make sure that they are following BC laws and not charging excessive interest rates. If you do not deal with a licensed payday lender, you may not be protected under BC law.
• Read the fine print! Find out about the terms and conditions of the loan. This is the best way to make an informed decision about your loan.
• Watch for red flags. Can you find the business? Do a quick internet search to make sure that the business has a valid address. Try and make sure that the business gives you real contact information. The internet is also a good source for customer reviews.

Check a payday lender’s licence status.