Are there any rules about how much interest a payday loan company can charge?

Are there any rules about how much a payday loan company can charge?

The following answer is taken from Payday Loans Bill of Rights, produced by Ontario Ministry of Consumer Services.

Yes. Ontario has set a maximum on the total cost of borrowing that payday lenders can charge consumers who enter into a payday contract. Payday lenders can charge no more than $21 for every $100 that a consumer borrows.

As a consumer in Ontario, if you are thinking of getting a payday loan, you have additional rights, including:

Full disclosure on your payday loan agreement

  • Payday lenders must place certain information on the first page of your payday contract. This includes:
    • The amount you are borrowing
    • The number of days your loan agreement is for (for example, ten or 14 days)
    • The amount you will pay for your loan (your "total cost of borrowing").

A two-day "cooling off" period

  • You have two business days to cancel your payday loan agreement without penalty. You do not need to give a reason for canceling.
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