Payday loan costs and fees in Ontario
Ontario sets a hard ceiling on what a payday loan can cost. Here is exactly what that means for the dollars you repay — and what a lender is not allowed to charge you.
The legal maximum
Under Ontario's Payday Loans Act, 2008, the cost of borrowing on a payday loan is capped at $14 for every $100 borrowed. That figure is set by regulation and applies to every licensed lender in the province — no lender may charge more, and no lender may add other charges on top.
What you actually repay
The table below shows the cost and total repayment at the Ontario maximum across the range of loan amounts we offer.
| You borrow | Cost of borrowing | You repay |
|---|---|---|
| $100 | $14 | $114 |
| $300 | $42 | $342 |
| $500 | $70 | $570 |
| $1000 | $140 | $1140 |
| $1500 | $210 | $1710 |
What a lender cannot charge
In Ontario, a payday lender may not charge you anything beyond the permitted cost of borrowing. That rules out:
- Application or processing fees.
- Administration or set-up fees.
- Charges for repaying your loan early.
- Any fee for extending or rolling over a loan.
If a lender asks for a charge that is not the cost of borrowing, that is a warning sign — and it is not permitted.
How APR fits in
APR, or annual percentage rate, expresses the cost of borrowing as if the loan ran for a full year. Because a payday loan is repaid in a matter of weeks, APR produces a very large number: a 14-day $300 loan with a $42 cost works out to an APR of 365.00%.
That number is accurate, but it is worth understanding what it does and does not tell you. It does tell you that payday credit is expensive relative to a credit card or a line of credit. It does not tell you the dollars you will pay — which, on a $300 loan, is $42, once.
Why the term matters
The cost of borrowing does not change with the length of the term: it is a flat $14 per $100 whether you repay in 14 days or 62. That means a longer term does not cost you more in dollars, but it does mean the debt stays outstanding longer. Repaying as soon as you can is always the better choice.
Repaying early
You can repay your payday loan in full at any time. There is no penalty and no additional charge for doing so. The cost of borrowing is fixed, so early repayment does not reduce it — but it clears the loan and ends your obligation.
Budgeting for repayment
Before you borrow, work out what your paycheque looks like on the due date. The amount you repay is deducted automatically, along with your usual bills. If repaying in full on your next payday would leave you short again, a payday loan is unlikely to help — see our guide to alternatives to payday loans.
