A payday loan can look simple when the fee is advertised as a dollar amount rather than an interest rate. Borrow $300. Pay a $42 borrowing charge.
At first glance, $42 may not seem especially large when you need $300 for an urgent expense. The problem is that payday loans are designed to be repaid over a short period. Once that short borrowing period is taken into account, they can be significantly more expensive than many traditional forms of credit.
If you’re considering a payday loan, understanding the cost before apply is just as important as knowing how much you may be able to borrow. This guide explains current payday loan costs in Canada, how the $14-per-$100 limit works, what a $300, $500 or $1,000 loan could cost, and why provincial rules still matter.
How Much Does a Payday Loan Cost in Canada?
In Canadian provinces with specific payday-loan regulatory regimes, the current maximum cost of borrowing is generally:
$14 for every $100 borrowed
That means a lender charging the maximum permitted amount would charge:
| Amount Borrowed | Maximum Cost at $14/$100 | Principal + Borrowing Cost |
|---|---|---|
| $100 | $14 | $114 |
| $200 | $28 | $228 |
| $300 | $42 | $342 |
| $400 | $56 | $456 |
| $500 | $70 | $570 |
| $600 | $84 | $684 |
| $750 | $105 | $855 |
| $1,000 | $140 | $1,140 |
| $1,500 | $210 | $1,710 |
These examples assume the maximum $14-per-$100 borrowing cost and repayment as agreed. Late payments, dishonoured payments and other circumstances may result in additional costs where permitted by applicable law.
Why Did Payday Loan Costs Change to $14 per $100?
Canada’s payday-loan cost framework changed significantly on January 1, 2025.
Federal changes lowered the criminal rate of interest to 35% APR and established a maximum payday-loan borrowing cost of $14 per $100 borrowed for the provincial payday-lending exemption.
Provincial rules were subsequently aligned with this framework. That’s important when reading older articles online. You may still encounter pages referring to:
- $15 per $100
- $17 per $100
and other older provincial limits. Those figures may reflect previous rules rather than the current maximum.
Always check the publication or update date when researching payday-loan costs.
Payday Loan Fees by Province in Canada
Payday lending is not regulated exactly the same way everywhere in Canada.
The federal framework sets important boundaries, but provinces establish their own payday-lending rules, licensing requirements and consumer protections.
Here’s the current general :
| Province | Maximum Payday Loan Cost | Example Cost on $500 |
|---|---|---|
| Ontario | $14 per $100 | $70 |
| Alberta | $14 per $100 | $70 |
| British Columbia | $14 per $100 | $70 |
| Manitoba | $14 per $100 | $70 |
| Saskatchewan | $14 per $100 | $70 |
| New Brunswick | $14 per $100 | $70 |
| Nova Scotia | $14 per $100 | $70 |
| Prince Edward Island | $14 per $100 | $70 |
| Newfoundland and Labrador | $14 per $100 | $70 |
Quebec is different. It does not use the same provincial payday-loan regulatory model as the nine provinces listed above. Quebec’s consumer-credit and high-cost-credit framework should therefore be considered separately rather than assuming the $14-per-$100 payday-loan model applies in exactly the same way.
The territories also don’t have the same specific payday-loan regimes as the provinces listed above. For that reason, don’t assume that seeing “$14 per $100” on a national website tells you everything you need to know.
Payday Loan Costs by Province
The maximum allowable borrowing cost varies by province — here's how it breaks down where CashLift can connect you with a participating lender.
Ontario
Ontario also provides additional borrower protections. Payday-loan agreements generally have a two-business-day cancellation period, and rollover loans are prohibited. Ontario also restricts the amount a payday lender can advance relative to the borrower's net income.
Alberta
A payday loan in Alberta is generally a loan of $1,500 or less with a term not exceeding 62 days. Alberta's payday-loan regulation applies to lenders operating from physical locations as well as lenders offering payday loans over the internet.
British Columbia
B.C. also has an important restriction on loan size. A payday lender generally cannot advance more than 50% of the borrower's applicable net pay or other net income. That doesn't mean borrowing 50% of your income is recommended — it's a regulatory limit, not an affordability target.
Manitoba
Manitoba also has a significant loan-size restriction based on 30% of the borrower's net pay. That makes Manitoba's rules different from provinces such as Ontario and British Columbia even though the headline $14-per-$100 borrowing cost is now the same.
Nova Scotia
Payday lenders serving Nova Scotia consumers are subject to provincial requirements, including licensing and consumer-protection rules.
Payday Loan vs Other Ways to Borrow $300
This is one of the most useful comparisons for someone considering a payday loan.
The Financial Consumer Agency of Canada provides an illustrative comparison based on borrowing $300 for 14 days:
| Borrowing Method | Illustrative 14-Day Cost |
|---|---|
| Line of credit | $5.92 |
| Overdraft protection | $7.42 |
| Credit-card cash advance | $7.65 |
| Payday loan | $42.00 |
The assumptions behind each product differ, and not everyone will qualify for every alternative.
Still, the comparison demonstrates why payday loans are considered a high-cost form of credit.
The speed or convenience of a payday loan shouldn’t prevent you from checking whether a less expensive option is available.
What Happens If You Don’t Repay on Time?
The $14-per-$100 figure describes the maximum initial borrowing cost in provinces with payday-loan regimes.
It doesn’t necessarily describe every possible consequence of missing repayment.
Depending on the province and circumstances, a missed payment may result in:
additional permitted charges;
interest on an outstanding balance;
a dishonoured-payment charge;
a fee from your own financial institution;
collection activity;
or other consequences permitted under applicable law.
Federal guidance indicates that in regulated provinces, a payday lender may charge a one-time fee of up to $20 for a dishonoured cheque/payment, subject to applicable provincial rules.
Your own bank may separately charge an NSF fee.
That’s why a $342 obligation shouldn’t be treated as guaranteed to remain $342 indefinitely if it isn’t repaid as agreed.
Read the agreement carefully.
Does Interac e-Transfer Make a Payday Loan Cheaper?
Not necessarily. Interac e-Transfer describes a possible method for delivering approved funds.
It doesn’t determine the cost of borrowing. Two loan offers could both use electronic funding while having different terms, repayment requirements or other features.
The fact that money can potentially be transferred electronically shouldn’t be the main reason for accepting an offer.
Our instant e-Transfer loans in Canada guide explains the difference between electronic funding and lender processing.
Does Bad Credit Increase the Payday Loan Fee?
The provincial maximum borrowing-cost rules still apply to payday loans subject to those regulations.
A lender cannot simply ignore the applicable payday-loan cost ceiling because an applicant has poor credit. However, eligibility and underwriting criteria vary between lenders.
A lender may review income, banking information, existing obligations, credit information or other factors when deciding whether it is willing to offer a loan.
CashLift doesn’t set lender approval criteria and doesn’t guarantee approval for any credit profile.
Why Repeated Payday Borrowing Becomes Expensive
One $300 loan at the maximum borrowing cost: $42
If someone repeatedly incurs the same borrowing cost, the dollars accumulate quickly. For illustration:
| Number of $300 Loans | Borrowing Cost at $42 Each |
|---|---|
| 1 | $42 |
| 2 | $84 |
| 4 | $168 |
| 6 | $252 |
| 10 | $420 |
This isn’t meant to suggest that taking repeated loans is permitted in every circumstance or that every loan would have identical terms.
A relatively small fee becomes substantial when borrowing repeats.
If you’re repeatedly short after repaying payday loans, another loan may be maintaining the problem rather than solving it.
Payday Loan Costs in Canada FAQs
In the nine provinces with specific payday loan regulatory regimes, the maximum cost is currently $14 for every $100 borrowed.
Provincial rules and protections still vary, so check the requirements where you live.
Using the Financial Consumer Agency of Canada's $300-for-14-days example, a $42 borrowing cost is equivalent to an annualized interest rate of approximately 365%.
The annualized figure is useful for understanding why payday credit is considered expensive compared with many conventional forms of borrowing.
The 9 provinces with specific payday-loan regimes currently use the $14-per-$100 maximum, but their other rules are not identical.
Loan limits, cancellation rights, repayment protections, licensing and other requirements can differ.
A payday lender must comply with the applicable legal cost limits. Having poor credit doesn't allow a lender to disregard those limits.
Additional consequences may apply to dishonoured payments. Federal guidance notes that regulated provinces may permit a one-time dishonoured-payment charge of up to $20, subject to applicable provincial law.
Your financial institution may also impose its own NSF charge.
Know the Cost Before You Apply
When money is tight, it's natural to focus on the amount you need today. But payday borrowing should be considered from the other direction:
Before accepting an offer, verify the lender, understand the complete agreement and compare the repayment with the income and essential expenses coming next.
If a lower-cost solution can solve the same problem, consider that first.
Explore Your Options